1 2 3 P8-7A Compute the target price using absorption-cost pricing and variable-cost pricing Stent Corporation needs to set a target price for its newly designed product EverReady. The following data relate to this new product. Per Unit $20 $40 $10 Total Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead $1,600,000 10 Variable selling and administrative expenses $5 Fixed selling and administrative expenses $1,120,000 12 13 The costs shown above are based on a budgeted volume of 80,000 units produced and sold each year. Stent 14 uses cost-plus pricing methods to set its target selling price. Because some managers prefer absorption-cost 15 pricing and others prefer variable-cost pricing, the accounting department provides information under both 16 approaches using a markup of 50% on absorption cost and a markup of 80% on variable cost. 17 18 Instructions 19 (a) Compute the target price for unit of EverReady using absorption-cost pricing. 20 (b) Compute the target price for unit of EverReady using variable-cost pricing. 21 NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a