Question

RCE manufactures radios and alarm clocks. RCE has just designed a new high-definition-radio alarm clock with added features. The primary cost of the new alarm clock is direct materials, with a cost of $25. Direct labor cost is estimated to be $5 per unit, overhead is estimated to be $7 per unit, and selling and administrative expenses are estimated to be $2 per unit.

Required
If RCE desires a profit of $15 per unit, what is the required markup on direct materials? What is the selling price of the new radio alarm clock?



$1.99
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  • CreatedMarch 11, 2015
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