Compute the target selling price per unit

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Reference no: EM132511016

Kasper Corporation has made a number of changes to their manufacturing process resulting in a new cost structure for their lead product. The total investment of the product is now $1,000,000. The company has a desired return (ROI) of 20%. The anticipated annual volume is 25,000 units.

Following is additional information on the product.

Per Unit                                                 Total
Direct material                                   $6
Direct labor                                       $11
Variable manufacturing overhead            $15
Fixed manufacturing overhead                 $200,000
Variable selling and administrative expense  $14
Fixed selling and administrative expense     $100,000

Required:

Question a. Compute the total cost per unit.

Question b. Compute the desired ROI per unit.

Question c. Compute the target selling price per unit.

Reference no: EM132511016

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