Santiago Manufacturing prices its products at full cost plus 40 percent. The company has two support departments and two production departments. Budgeted costs and normal activity levels are as follows:

	Support Departments		Producing Departments
	A	B	C	D
Overhead costs	$20,000	$50,000	$90,000	$120,000
Square feet	2,000	2,400	4,000	12,000
Number of employees	20	30	60	40
Direct labor hours	-	-	10,000	6,400
Machine hours	-	-	6,000	10,800

Support Department A's costs are distributed on a per square meter basis, while the costs of Support Department B are distributed by the number of employees. Department C uses working hours directly to assign overheads to products, while Department D uses machine hours. One of the company's products requires 4 direct labor hours per unit in Department C, and Department D' does not require time. The cost of direct materials for the product is $45 per unit and direct labor is $20 per unit. If the direct distribution method is used and the company follows the usual pricing policy, what would be the selling price of the product?

Answer rating: 100% (QA)

To calculate the selling price of the product we need to determine the total cost of producing one u... View the full answer