These costs are based on a budgeted volume of 80000 units

Reference no: EM13601423

Gill Corporation needs to set a target price for its newly designed product M14-M16. The following data relate to this new product.
Per Unit Total
Direct materials $20
Direct labor $42
Variable manufacturing overhead $10
Fixed manufacturing overhead $1,440,000
Variable selling and administrative expenses $5
Fixed selling and administrative expenses $1,040,000

These costs are based on a budgeted volume of 80,000 units produced and sold each year. Gill uses cost-plus pricing methods to set its target selling price. The markup on total unit cost is 30%.

1. Compute the desired ROI per unit for M14-M16.

2. Compute the target selling price for M14-M16.

Reference no: EM13601423

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