Reference no: EM133042134

Question - The following data relate to LawnMate Corporation's top-of-the-line lawnmower.

Variable manufacturing cost $550

Applied fixed manufacturing cost 110

Variable selling and administrative cost 132

Allocated fixed selling and administrative cost ?

To achieve a target price of $990 per lawnmower, the markup percentage is 12.5 per cent on total unit cost.

Required -

1. What is the fixed selling and administrative cost allocated to each unit of LawnMate's top-of-the-line mower?

2. For each of the following cost bases, develop a cost-plus pricing formula that will result in a target price of $990 per mower:

(a) variable manufacturing cost

(b) absorption manufacturing cost

(c) total variable cost.