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Sirhuds Inc., a maker of smart watches, reports the information below on its product. The company uses absorption costing and has a target markup of 40% of absorption cost per unit. Compute the target selling price per unit under absorption costing.
Direct Materials Cost$100 per unit
Direct Labor Cost$30 per unit
Variable Overhead Cost$8 per unit
Fixed Overhead Cost$600,000 per year
Variable selling and administrative expenses$3 per unit
Fixed selling and administrative expenses$120,000 per year
Expected production (and sales)50,000 units per year
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