Sidhu's Inc., a manufacturer of smart watches, provides the following information about their product. The company uses absorption costs and has a target profit margin of 40% of the absorption cost per unit. 

Direct materials cost   $100 per unit

Direct labor cost    $30 per unit

Variable Overhead Cost   $8 per unit

Fixed fixed cost    $600,000 per year

Variable Selling and Administrative Expenses   $3 per unit

Fixed selling and administrative expenses  $120,000 per year

Expected production (and sales)    50,000 units per year

Calculate the target selling price per unit under absorbing costing.

Answer rating: 100% (QA)

To calculate the target selling price per unit under absorption costing we need to determine the ab... View the full answer