A B C D E F G H | J K 1 2 3 Rios Company makes drones and uses the variable cost method in setting product price. Its costs for producing 20,000 units follow. The company targets a profit of $300,000 on this product. 4 5 Variable Costs per Unit 6 Direct materials $70 7 Direct labor 40 8 Overhead 25 9 Selling, general and administrative 15 10 11 Fixed Costs (total) 12 Overhead $670,000 13 Selling, general and administrative $590,000 14 15 Units produced 20,000 16 Targeted profit $300,000 17 18 Required: 19 1. Compute the total variable cost and the markup percentage. 20 2. Compute the dollar markup per unit on variable cost. 21 3. Compute the selling price per unit. 22 23 1. Total variable costs 24 1. Markup percentage 25 2. Markup per unit 26 3. Selling price per unit 27 28 $3,000,000 52% $78 $228 29 30 Students: The scratchpad area is for you to do any additional work you need to solve this question or can be used to show your work. 31 Nothing in this area will be graded, but it will be submitted with your assignment. 32