Question

CALCULATOR PRINTER аас National Corporation needs to set a target price for its newly designed product M14-M16. The following data relate to this new product. Per Total Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling and administrative expenses Unit 527 538 $11 $1,440,000 dy $4 Fixed selling and administrative expenses 5960,000 These costs are based on a budgeted volume of 80,000 units produced and sold each year, National uses cost plus pricing methods to set its target selling price. The markup percentage on total unit cost is 40% Compute the total variable cost per unit, total fixed cost per unit, and total cost per unit for M14-M16. Variable cost per unit Fixed cost per unit Total cost per unit

Answer 1

In total in total Answer) Desired output would be 80000 units Particulars Per unit Direct Materials $ 27.00 Direct Labour $ 38.00 Variable manf.OH $ 11.00 Variable Selling and admin oh $ 4.00 Total Variable cost per unit $ 80.00 Desired output would be 60000 units Particulars Per unit Direct Materials $ 27.00 Direct Labour $ 38.00 Variable manf.OH $ 11.00 Variable Selling and admin oh $ 4.00 Total Variable cost per unit $ 80.00 Fixed Manf. OH Fixed Selling Admin OH Total Fixed cost no of units to be sold Fixed cost Per unit $ 14,40,000.00 $ 9,60,000.00 $ 24,00,000.00 80000 units $ 30.00 24,00,000/80000) Fixed Manf. OH Fixed Selling Admin OH Total Fixed cost no of units to be sold Fixed cost Per unit $ 14,40,000.00 $ 9,60,000.00 $ 24,00,000.00 60000 $ 40.00 (24,00,000/60000) Total cost per unit $ 110.00 (80+30) Total cost per unit $ 120.00 ( 80+40) Desired ROI: Mark up is 40% from cost ROI Target Selling price per unit $ 44.00 (110*40/100) $ 154.00 (110+44)