Illinois Company Has Budgeted the Following Costs for the Production

question 124

Multiple Choice

Illinois Company has budgeted the following costs for the production of its only product:
$\begin{array}{ll}\text { Direct Materials } & \$ 35,000 \\\text { Direct Labor } & 25,000 \\\text { Variable indirect production costs } & 30,000 \\\text { Fixed indirect production costs } & 15,000 \\\text { Variable selling and administrative costs } & 7,500 \\\text { Fixed selling and administrative costs } & 12,500\\\text { Total Costs }&\$125,000\end{array}$
Illinois Company has a target profit of $40,000.The company will produce 1,000 units.The market price is $160 per unit.What is the target cost per unit?

• A) $40
• B) $120
• C) $125
• D) $165