Reference no: EM132967945

Assume the following data for 120,000 units of a product that Spectacular Company expects to produce and sell during the current year:

Manufacturing costs:

Direct materials $1,200,000
Direct labor $3,000,000

Factory overhead:

Variable costs$360,000
Fixed costs $150,000 $510,000
Total manufacturing costs $4,710,000

Selling and administrative expenses:

Variable expenses $360,000
Fixed costs $600,000
Total selling and administrative expenses $960,000
Total cost $5,670,000
Desired rate of return 23%
Total assets $1,600,000

Problem 1: What will the normal selling price per unit be if calculated using the product cost concept? (Round the answer to two decimal places.)

a.$48.75
b.$39.25
c.$50.32
d.$11.67