For the current year, Babcock Ltd., forecast sales of 42,000 units and production of 40,000 units. Other budget information for the year included:

Direct manufacturing labour.......................................$171,900

Variable manufacturing overhead..................................83,500

Direct materials.................................................................52,300

Variable selling expenses.................................................23,000

Fixed administrative expenses.....................................190,000

Fixed manufacturing overhead....................................240,000

The standard costs remained the same as in the previous year.

Babcock Ltd. is considering various cost bases. The company management require a 15% return on an investment base of $2,500,000; and, wants this cost built into all cost base options.

Required:

a. Compute the cost-plus price per unit using direct costing.

b. Compute the cost-plus price per unit using absorption costing.

c. Compute the cost-plus price per unit using the full product cost.