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Question - The market price for a product has been $60 per unit, but competitive pressures have reduced the market price to $56. The firm manufactures 18,500 of these products per year at a manufacturing cost of $60 per unit (including $32 fixed cost and $28 variable cost per unit). Other selling and administrative costs for the product are $10 per unit.
Required - The firm ignores competitive prices because it has a differentiated product. It uses full manufacturing cost-based pricing with a 30% markup. What is the firm's price?
Determine the total cost of each production department after allocating all support costs to the production departments
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