Exercise 85 Schopp ion makes a mechanical stuffed alligator

Exercise 8-5 Schopp ion makes a mechanical stuffed alligator that sings the Martian national anthem. The following information is available for Schopp Corporation\'s anticipated annual volume of 477,000 units Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling and administrative expenses $14.12 Fixed selling and administrative expenses $ 7.06 $11.24 $14.88 $3,257,910 $1,645,650 The company has a desired ROT of 25%. It has invested assets of $27,356,000. Compute the total cost per unit. (Round answer to 2 decimal places, e.g. 10.50.) Total cost per unit Compute the desired ROI per unit. (Round answer to 2 decimal places, e.g. 10.50) Desired ROI per unit Compute the markup percentage using total cost per unit. (Round answer to 2 decimal places, e.q. 10.50.)

Solution

1 Total cost per unit = (7.06+11.24+14.88+14.12)+(3257910+1645650)/477000= $57.58 2 Desired ROI per unit = (27356000*25%)/477000= $14.34 3 Markup percentage = 14.34/57.58= 24.90% 4 Target selling price = 57.58+14.34= $71.92