Question

Chapter 08 Homework Per Unit Total Direct materials $20 Direct labor $39 Variable manufacturing overhead Fixed manufacturing overhead $1,264,000 Variable selling and administrative expenses $6 Fixed selling and administrative expenses $ 1,106,000 These costs are based on a budgeted volume of 79,000 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

Solution and answer to question : -

	Calculation of Total Variable cost per unit
		Per Unit $
	Direct material	20
	Direct Labour	39
	Variable Manufacturing Overhead	15
	Variable Selling and Administrative Expenses	6
	Total Variable Overhead	80
	Calculation of Fixed cost per unit
		Cost $
	Fixed Manufacturing Overhead	1264000
	Fixed selling and administrative expenses	1106000
	Total Fixed Cost	2370000
	Total Volume	79000
	Fixed Cost per unit	30
	Calculation of Total cost per unit
		Per Unit $
	Variable Cost Per unit	80
	Fixed Cost per unit	30
	Total Cost Per unit	110
	Desired ROI Per Unit
		Per Unit $
	Total Cost Per Unit	110
	Mark up %	40%
	Desired ROI Formula   =	Total Cost per unit X Markup%
	Hence, Desired ROI =	110 X 40%
	Hence, Desired ROI =	44