Mathematics · Cost Accounting
The predicted selling price for a product has been set at $56 per unit. The desired mark-up on cost is 25% and the material cost for the product is estimated to be $16 before allowing for additional materials to account for a shrinkage of 20% (for every 10 kg of material input, only 8 kg is output). If labor is the only other cost and 2 hours are needed, what is the maximum rate per hour the business can pay to avoid a cost gap?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1$24.80
- 2$3.40
- 3$12.40✓
- 4$28.40
Correct answer
$12.40
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