Michigan Company Has Budgeted the Following Costs for the Production

question 15

Multiple Choice

Michigan Company has budgeted the following costs for the production of its only product:
$\begin{array}{ll}\text { Direct Materials } & \$ 35,000 \\\text { Direct Labor } & 25,000 \\\text { Variable indirect production costs } & 30,000 \\\text { Fixed indirect production costs } & 15,000 \\\text { Variable selling and administrative costs } & 7,500 \\\text { Fixed selling and administrative costs } & 12,500\\\text { Total Costs }&\$125,000\end{array}$
Michigan Company wants a profit of $50,000,and expects to produce 1,000 units.The market price is $150 per unit.What is the target cost per unit of the product?

• A) $100 per unit
• B) $125 per unit
• C) $150 per unit
• D) $175 per unit

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