Question

Conferences Rita Corporation produces commercial fertilizer spreaders. The following information is available for Rita's anticipated annual volume of 400.000 units. WP Collaborations Total WileyPLUS Support Per Unit $32 54 Assignments Account Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling and administrative expenses Fixed selling and administrative expenses $12,000,000 Dashboard 7,200.000 Courses The company has a desired ROI of 20%. It has invested assets of $120,000,000. Calendar Inbox Compute total cost per unit. Total cost per unit $ Get HELP SOS Compute desired ROI per unit. Desired ROI per unit $ Compute markup percentage using total cost per unit Mark-up percentage on the total cost per unit Compute target selling price. I Target price per unit $

Answer 1

1)TOTAL COST PER UNIT
Direct Material	$                           32
Direct Labor	$                           54
Variable manufacturing overhead	$                           72
variable selling and administrative expenses	$                           34
Fixed Manufacturing Overhead ($12000000/400000)	$                           30
Fixed selling and administrative overhead ($7200000/400000)	$                           18
Total cost per unit	$                         240
2)DESIRED ROI PER UNIT
ROI	20%
Asset value	$        120,000,000
Total desired return (Asset value X ROI)	$          24,000,000
No of Units	400000
Return per Unit	$                     60.00
3)MARKUP PERCENTAGE USING TOTAL COST PER UNIT
Desired Return per Unit (A)	$                     60.00
Total cost per unit (B)	$                         240
Mark up percentage ( A/B)	25.00%
4)TARGET SELLING PRICE
Total cost per unit	$                         240
Desired return per Unit	$                     60.00
Target selling price	$                         300