Answer:
the target selling price is $70.38
Explanation:
The target selling price is obtained by establishing the Total unit cost then adding a profit mark-up of 38%.
Unit Cost will include BOTH manufacturing and non-manufacturing costs to establish the target selling price as follows:
Calculation of Total unit Cost and target selling price.
direct materials $10.00
direct labor $4.00
variable manufacturing overhead $6.00
fixed manufacturing overhead $13.00
variable selling and administrative expenses $5.00
fixed selling and administrative expenses $13.00
total cost $51.00
add Profit mark -up at 38% $19.38
target selling price $70.38
