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Question - NT Department of Health rents their facilities to professional health workers for training sessions. Duration of each session is two hours. Anticipated annual volume is 1,000 sessions. The Health Department has invested $2,410,000 in their facility and expects a return on investment (ROI) of 22%. Budgeted costs for the coming year are shown in the table below:
Per Training Session Total Direct Materials $19
Direct Labor $410
Variable overhead $51
Fixed overhead $930,000
Variable selling and administrative expenses $38
Fixed selling and administrative expenses $510,000
Required -
1. Determine the total cost per training session.
2. Determine the desired ROI per training session.
3. Calculate the markup percentage on the total cost per training session.
4. Calculate the target price per training session.
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