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Per Unit Total
Direct Materials $50.00
Direct Labor $25.00
Variable Manufacturing overhead $20.00
Fixed manufacturing overhead $600,000
Variable selling and admin. Expenses $18.00
Fixed selling and admin expenses $400,000
Bolus Computer parts management request that the total cost per unit be used in a cost plus
Pricing products. On this particular product, management also directs that the target price
Be set to provide a 25% return on investment ROI on invested assets of $1,200,000.00
Instructions
B.
Assuming that the volume is 40,000 units compute the mark up percentage and target
Selling price that will allow bolus computer parts to earn its desired ROI of 25% on this
New component.
© BrainMass Inc. brainmass.com March 21, 2019, 4:06 pm ad1c9bdddf
https://brainmass.com/business/business-management/mark-up-percentage-and-target-selling-price-174048
Solution Preview
Variable costs per unit:
Direct Materials $50.00
Direct Labor $25.00
Variable Manufacturing overhead $20.00
Variable selling and admin. Expenses $18.00
Total: $113
For 50,000 units:
$ 5650000
Total Fixed costs:
Fixed manufacturing overhead $600,000 …
