Exercise M-3 (Part Level Submission) 50 $113 (a1) Open Show Work Exercise M-3 (P

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Exercise M-3 (Part Level Submission)

50

$113

(a1)

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Exercise M-3 (Part Level Submission)

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.
Direct materials $30 Direct labor 33 Manufacturing overhead

50

Total costs

$113

(a1)

Assume that Leno uses cost-plus pricing, setting the selling price 29% 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 $

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Explanation / Answer

Price charged for the All-Body swimsuit will be :

Total Cost (30+33+50) = 113

Selling price (Cost + 29% above cost ) = 113+ 29%*113 = 145.77

So Price charged for All-Body Swinsuit will be $145.77

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