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Exercise 4-11B How fixed cost allocation affects a pricing decision Monarch Manufacturing Company...

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Accounting

Exercise 4-11B How fixed cost allocation affects a pricing decision
Monarch Manufacturing Company expects to make 72,000 travel sewing kits during Year 3. In January, the company made 1,800 kits. Materials and labor costs for January were $9,000 and $11,250, respectively. In February, Monarch produced 2,200 kits. Material and labor costs for February were $11,000 and $13,750, respectively. The company paid $180,000 for annual factory insurance on January 10, Year 3. Ignore other manufacturing overhead costs.
Required
Assuming that Monarch desires to sell its sewing kits for cost plus 20 percent of cost, what price should it charge for the kits produced in January and February?
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