Talia Corp. produces digital cameras. For each camera produced, direct materials are $20, direct labor is $16, variable manufacturing overhead is $12, fixed manufacturing overhead is $28, variable selling and administrative expenses are $10, and fixed selling and administrative expenses are $24. Compute the target selling price assuming a 40% markup on total per unit cost. Target selling price

Talia Corp.

Target Selling Price

= $154

Explanation:

a) Data and Calculations:

Direct materials =                                           $20

Direct labor =                                                     16

Variable manufacturing overhead =                12

Fixed manufacturing overhead =                    28

Variable selling & administrative expenses = 10

Fixed selling and administrative expenses = 24

Total cost                                                       $110

40% markup on total per unit cost =              44

Target Selling Price =                                  $154

b) Talia bases its target selling price on the addition of 40% of the total cost  to the total cost (including manufacturing costs, selling, and administrative expenses).

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