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Question - The following data pertain to LawnMate Corporation's top-of-the-line lawn mower.
Variable manufacturing cost $275
Applied fixed manufacturing cost 55
Variable selling and administrative cost 66
Allocated fixed selling and administrative cost ?
To achieve a target price of $495 per lawn mower, the markup percentage is 12.5 percent 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 $495 per mower: (a) variable manufacturing cost, (b) absorption manufacturing cost, and (c) total variable cost.
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