13 Nov Gildersleeve Corporation manufactures a product th
Gildersleeve Corporation manufactures a product that has the following costs: Per unit Per yearDirect Materials $6.00Direct Labour 5.00Variable manufacturing overhead 4.00Fixed manufacturing overhead $360,000Variable SG&A expenses 5.00Fixed SG&A expenses 120,000The company uses the absorption costing approach to cost-plus pricing. The pricing calculations are based on budgeted production and sales of 30,000 units per year.The company has invested $600,000 in this product and expects a return on investment of 15%.Required:a) Compute the markup on absorption cost.b) Compute the target selling price of the product using the absorption costing approach.
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