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ABC Manufacturing is attempting to set the product price using the Cost Approach method of price...

ABC Manufacturing is attempting to set the product price using the Cost Approach method of price determination. The Direct Material Cost is $5,000 and the Direct Labor Cost is $8,000. The Factor Overhead is 130% of the Direct Labor Cost. The General Administrative and Selling Cost is 15% of the Manufacturing Cost and the Profit is 12% of the Total Cost. What is the selling price that ABC should set for this product? Show your work.

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Answer #1
Calculations Particulars Amount $
A Direct Materials            5,000
B Direct Labor            8,000
C = A + B Prime Cost          13,000
D = 130% of B Factory Overhead          10,400
E = C + D Manufacturing cost          23,400
F = E x 15% Selling and administrative costs            3,510
G = E + F Total cost          26,910
H = G x 12% Profit            3,229
I = G + H Selling Price          30,139
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