Price Setting: Multiple Products

Tech Com$$s predicted variable and fixed costs for next year are as follows:

Variable Costs Fixed Costs Manufacturing$$486,000$ $$509,040$ Selling and administrative$122,400712,800$ Total$$608,400$ $$1,221,840$

Tech Com is a small company producing a wide variety of computer devices. Per$-$unit manufacturing cost information about one of these products, a webcam, is as follows.

Direct materials$$8$ Direct labor$4$ Manufacturing overhead:Variable$3$ Fixed$6$ Total manufacturing costs$$21$

Variable selling and administrative costs for the webcam are $$4$ per unit. Management has set a target profit for next year of $$390,000.$

Required

a$.$ Determine the markup percentage on variable costs required to earn the desired profit.

Note: Round your answer to the nearest whole percentage point.

Answer $1$

$\%$

b$.$Use variable cost markup to determine a suggested selling price for the webcam. $Answer $2$

c$.$For the webcam, break the markup on variable costs into separate parts for fixed costs and profit.

Note:Round each of your answers below to two decimal places $($for example, enter $2\mathrm{.}34$ for $2\mathrm{.}3555).$

Markup to cover fixed costs $Answer $3$

Markup to provide for a profit $Answer $4$

d$.$Determine the markup percentage on manufacturing costs required to earn the desired profit.

Note: Round your answer to the nearest whole percentage point.

Answer $5$

$\%$

e$.$Use the manufacturing costs markup to determine a suggested selling price for the webcam.

Note:Use the rounded percentage from part $($d$)$ in your calculation.