Garcia co. sells snowboards. each snowboard requires direct materials of $100, direct labor of $30, and variable overhead of $45. the company expects fixed overhead costs of $635,000 and fixed selling and administrative costs of $115,000 for the next year. it expects to produce and sell 10,000 snowboards in the next year. what will be the selling price per unit if garcia uses a markup of 15% of total cost? (round your answer to 2 decimal places.)

Selling Price per unit = $287.5 per unit

Explanation:

Provided quantum of sales = 10,000 units

Cost statement for 10,000 units

Direct material = $100 10,000 = $1,000,000

Direct Labor = $30 10,000 = $300,000

Variable Overhead = $45 10,000 = $450,000

Fixed Overhead Costs = $635,000

Fixed Selling and administrative Cost = $115,000

Total = $2,500,000

Add: Profit mark up 15% = $375,000

Total Selling Value = $2,875,000

Selling Price per unit = $2,875,000/10,000 = $287.5 per unit

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