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Question - Rios Company makes drones and uses the variable cost method in setting product price. Its costs for producing 37,000 units follow. The company targets a profit of $317,000 on this product.
Variable Costs per Unit
Direct materials $ 87
Direct labor 57
Overhead 42
Selling, general and administrative 32
Fixed Costs (total)
Overhead $687,000
Selling, general and administrative 624,000
1. What is the total variable cost and the markup percentage?
2. What is the dollar markup per unit on variable cost?
3. What is the selling price per unit?
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