Compute the mark up percentage and target selling price

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Reference no: EM1376977

A budget of 50,000 units

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

Suppose that the volume is 40,000 units calculate the mark up percentage and target Selling price that will allow bolus computer parts to earn its desired ROI of 25 percent on this New component.

Reference no: EM1376977

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