Largo, Inc., which uses a volume-based cost system, produces cat condos, and has

Question

Largo, Inc., which uses a volume-based cost system, produces cat condos, and has a gross profit margin of 50%. Direct materials cost $21 per unit, and direct labor costs $17 per unit. Manufacturing overhead is applied at a rate of 200% of direct labor cost. Nonmanufacturing costs are $28 per unit. How much does each cat condo sell for?

$198

$104

$126

$144

Largo, Inc., which uses a volume-based cost system, produces cat condos, and has a gross profit margin of 50%. Direct materials cost $21 per unit, and direct labor costs $17 per unit. Manufacturing overhead is applied at a rate of 200% of direct labor cost. Nonmanufacturing costs are $28 per unit. How much does each cat condo sell for?

Explanation / Answer

Direct Material 21 Direct Labour 17 Manufacturing Overhead 34 Non Manufacturing Cost 28 Total Cost 100 Gross profit margin

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