Please help me to figure it out! Thanks! Product Cost Concept of Product Pricing

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Please help me to figure it out! Thanks!

Product Cost Concept of Product Pricing Willis Products Inc. uses the product cost concept of applying the cost-plus approach to product pricing. The costs of producing and selling 6,000 units of medical tablets are as follows: Variable costs per unit: Fixed costs: Direct materials Direct labor Factory overhead Selling and admin. exp $83 30 26 21 $160 Factory overhead $174,000 Selling and admin. exp. 60,000 Total Willis Products desires a profit equal to a 20% rate of return on invested assets of $427,800 a. Determine the total manufacturing costs for the production and sale of 6,000 units. Variable 834,000 Fixed factory overhead 174,000V Total 1,008,000 Determine the cost amount per unit for the production and sale of 6,000 units. 168 per unit b. Determine the product cost markup percentage per unit. Round your percentage answer to one decimal place 211 X % c. Determine the selling price per unit. Use the rounded product cost markup percentage in your calculations, and round the amount of the markup to the nearest whole dollar per unit

Explanation / Answer

a) Calculate cost :

Cost per unit = 1008000/6000 = $168 per unit

b) Markup percentage = (427800*20%/6000)+31*100/168 = 26.9%

c) Selling price per unit = 168+(168*26.9%) = $213 per unit

Total manufacturing cost Variable 834000 Fixed 174000 Total 1008000

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