Brett’s Guitars prices its products using a 40% markup on total variable cost to cover fixed costs and to provide a reasonable return on investment. Using the following data and the contribution approach to pricing products, estimate the normal selling price. Note: The markup will end up being 40% of the selling price.

                                                                                                                Cost per Unit

Direct materials. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $10

Direct labor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Variable manufacturing overhead . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Variable selling and administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Fixed manufacturing overhead totals $80,000 per year. Fixed selling and administrative expenses are $55,000 per year. The average number of units sold per year is 5,000.