Ayayai Corporation needs to set a target price for its newly designed product M14-M16. The following data relate to this new product. Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling and administrative expenses Fixed selling and administrative expenses (a) Variable cost per unit Fixed cost per unit Total cost per unit Per Unit $ $28 $40 These costs are based on a budgeted volume of 64,000 units produced and sold each year. Ayayai uses cost-plus pricing methods to set its target selling price. The markup percentage on total unit cost is 40%. $ $10 $7 Compute the total unit variable cost, total unit fixed cost, and total unit cost for M14-M16. Total $1,152,000 $768,000

In cost accounting, overhead refers to those expenses which occur during the operating of a business. Overhead includes the fixed, variable, or semi-variable which is not directly involved with a company product or service. It is very important to analyz…