Hansen Corporation Needs To Set A Target Price For Its Newly Designed Product Ev

Hansen Corporation needs to set a target price for its newly designed product EverReady. The following data relate to this new product. Per UnitTotal Direct materials$20 Direct labor$40 Variable manufacturing overhead$10 Fixed manufacturing overhead $1,400,000 Variable selling and administrative expenses$5 Fixed selling and administrative expenses $1,120,000The costs shown above are based on a budgeted volume of 80,000 units produced and sold each year. Hansen uses cost-plus pricing methods to set its target selling price. Because some managers prefer absorption-cost pricing and others prefer variable-cost pricing, the department provides information under both approaches using a markup of 50% on absorption cost and a markup of 75% on variable cost.

Posted in Uncategorized