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Leno Company makes swimsuits and sells these suits directly to retailers. Although Leno...

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Leno Company makes swimsuits and sells these suits directly to retailers. Although Leno has a variety of suits, it does not make the All-Body suit used by highly skilled swimmers. The market research department believes that a strong market exists for this type of suit. The department indicates that the All-Body suit would sell for approximately $100. Given its experience, Leno believes the All-Body suit would have the following manufacturing costs. a. Assume that Leno uses cost-plus pricing, setting the selling price 25% above its costs. What would be the price charged for the All-Body swimsuit? b. Assume that Leno uses target costing. What is the price that Leno would charge the retailer for the All-Body suit? Direct Materials Direct Labor Manufacturing Overhead Total Costs $25 30 45 $100

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