The cost of producing one unit of product Tidser is:
Direct materials
$4
Direct labour
$6
Variable overheads
$3
Fixed overheads
$2
$15
The Tidser is to be priced using the marginal cost plus method. What would the price be if 190% were added to cost on this basis?
The price would be $________ (to the nearest cent)
The correct answer is : $37.70.
Marginal cost
Profit
= $13 x 190%
= $24.70
Marginal cost plus price
= marginal cost + profit
= $13 + $24.70
= $37.70
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