Question

Estimate the unit selling price of an item for which the following data is available. Labor 15 hours at $26/hr Overhead 150% of labor Material Costs $89 each Packing Costs 10% of labor Subcontract Cost $11 each Sales Commission 5% of selling price Profit 10% of selling price

Answer 1

Answer:

$1281.1

Explanation:

Unit selling price is total cost plus markup(percentage profit on total cost price)

Assuming overhead is already apportioned to each product at $585 each

Total cost:

Labor 15hrs at $26/hr=15×26=$390

Overhead 150% of labor=150%×390=$585

Material Costs= $89

Packing Costs= 10%×390= $39

Subcontract Cost= $11

Sales Commission= 5% of selling price=$55.7

Total cost = $1169.7

Profit =10% of selling price= $111.4

Selling price =total cost + profit

= $1281.1