Question

In order to sell a product at a profit the product must be priced higher than the total of what it costs you to build the unit, plus period expenses, and plus overhead. At the end of last year the broad cost leader Digby had an Elite product Drum. Use the Inquirer's Production Analysis to find Drum's production cost, (labor+materials). Exclude possible inventory carrying costs. Assume period expenses and overhead total 1/2 of their production cost. What is the minimum price the product could have been sold for to cover the unit cost, period expenses, and overhead?

Answer 1

Over head it costs 1/2