2)Torres Inc. recently began production of a new product, the halogen light, which required an investment of $600,000 in assets. The costs of producing and selling 10,000 halogen lights are estimated as follows:

Variable costs per unit: Fixed costs:

Direct materials $32 Factory overhead $180,000

Direct labor 12 S & A expenses 60,000

Factory overhead 8

S & A Expenses 7

Total variable he costs/unit $59

Torres is considering a selling price for the halogen light. Management has decided to use the cost-plus approach to product pricing and has indicated that the product must earn 10 % return on invested assets.

Instructions:

1. Determine the amount of desired profit from the production and sale of the halogen light
2. Assuming that the total cost method is used, determine A) the cost amount per unit, B) the

markup percentage (rounded to two decimal places), and C) the selling price, rounded to nearest dollar.

1. Assuming that the product cost method is used, determine A) the cost amount per unit, B) the

markup percentage (rounded to two decimal places), and C) the selling price, rounded to nearest dollar.

1. Assuming that the variable cost method is used, determine A) the cost amount per unit, B) the markup percentage (rounded to two decimal places), and the selling price. Round markup to the nearest dollar.