Fake Fur Company manufactures ecologically friendly fabric. Its primary customers are retailers. The estimated cost to make a meter of fabric is:
Direct materials – $1.50
Direct labor – $0.70
Variable overhead – $2.05
Fixed overhead – $3.50
Total = $7.75
Variable selling costs per unit – $2.00
Fixed administration charges – $12,500
If Fake Fur Company prices its product using a markup of 150% of its variable production costs, what would the unit selling price be?
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