Leno Company makes swimsuits and sells these suits directly to retailers. Althou

Question

Leno Company makes swimsuits and sells these suits directly to retailers. Although Leno has a variety of suits, it does not make the All-Body suit used by highly skilled swimmers. The market research department believes that a strong market exists for this type of suit. The department indicates that the All-Body suit would sell for approximately $114. Given its experience, Leno believes the All-Body suit would have the following manufacturing costs.

47

Total Costs $110

Direct materials $29 Direct labor 34 Manufacturing overhead

47

Total Costs $110

Assume that Leno uses cost-plus pricing, setting the selling price 20% above its costs, what would be the price charged for the All-Body swimsuit? (Round answer to 2 decimal places, e.g. 10.50.) Selling price 132 SHOW SOLUTION SHOW ANSWER LINK TO TEXT LINK TO TEXT By accessing this Question Assistance, you will learn while you earn points based on the Point Potential Policy set by your instructor. Attempts: 1 of 3 used (b) Your answer is incorrect. Try again. Assume that Leno uses target costing. What is the price that Leno would charge the retailer for the All-Body swimsuit? Selling price s

Explanation / Answer

b Selling price = 114 Under target costing market price is the selling price

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