Ritner Corporation manufactures a product that has the following costs: ...
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Accounting
Ritner Corporation manufactures a product that has the following costs:
Per Unit
Per Year
Direct materials
$
23.50
Direct labor
$
15.00
Variable manufacturing overhead
$
3.40
Fixed manufacturing overhead
$
450,800
Variable selling and administrative expenses
$
2.80
Fixed selling and administrative expenses
$
592,900
The company uses the absorption costing approach to cost-plus pricing as described in the text. The pricing calculations are based on budgeted production and sales of 30,300 units per year.
The company has invested $361,300 in this product and expects a return on investment of 9%.
Required:
a. Compute the markup on absorption cost. (Round your intermediate and final answer to 2 decimal places.)
b. Compute the selling price of the product using the absorption costing approach. (Round your intermediate and final answer to 2 decimal places.)
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