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Hansen Corporation needs to set a target price for...

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Hansen Corporation needs to set a target price for its newly designed product EverReady. The following data relate to this new product. Per Unit Total Direct materials $16.00 Direct labor $41.00 Variable manufacturing overhead $13.00 Fixed manufacturing overhead $1,265,600 Variable selling and administrative expenses $4.00 Fixed selling and administrative expenses $1,208,648 The costs shown above are based on a budgeted volume of 79,100 units produced and sold each year. Hansen uses cost-plus pricing methods to set its target selling price. Because some managers prefer absorption-cost pricing and others prefer variable-cost pricing, the department provides information under both approaches using a markup of 45% on absorption cost and a markup of 68.51% on variable cost.

 

Paper#7660 | Written in 18-Jul-2015

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