Solution-Compute total variable cost and total fixed cost

Compute total variable cost and total fixed cost per unit

Assignment Help Cost Accounting

Reference no: EM13888815

Harrington Corporation needs to set a target price for its newly designed product R2-D2. The following data relate to this new product.

	Per Unit	Total
Direct materials	$ 8
Direct labor	$14
Variable manufacturing overhead	$ 7
Fixed manufacturing overhead		$2,000,000
Variable selling and administrative expenses	$ 6
Fixed selling and administrative expenses		$1,200,000

These costs are based on a budgeted volume of 100,000 units produced and sold each year. Harrington uses cost-plus pricing methods to set its target selling price. The markup on total unit cost is 30%.

Instructions

(a) Compute the total variable cost per unit, total fixed cost per unit, and total cost per unit for R2-D2.

(b) Compute the desired ROI per unit for R2-D2.

(d) Compute variable cost per unit, fixed cost per unit, and total cost per unit assuming that 80,000 R2-D2s are sold during the year.

Reference no: EM13888815

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Compute total variable cost and total fixed cost per unit

Reference no: EM13888815

Reference no: EM13888815

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