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What is the target mark-up per unit

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Reference no: EM132548828

Schlickau Company manufactures basketball backboards. The following information pertains to the company's normal operations per month:

Output units15,000 boards

Direct manufacturing labor-hours5,000 hours

Machine-hours4,000 hours

Direct materials per unit$100

Direct manufacturing labor per hour$12

Variable manufacturing overhead costs$150,000

Fixed manufacturing overhead costs$300,000

Research and Development costs (all fixed)$150,000

Marketing and distribution costs (50% fixed)$300,000

Question 1: If the invested capital of Schlickau Company is $9,000,000 and the target annual rate of return on investment is 50%, what is the target mark-up per unit?

A.$25
B.$375,000
C.$300
D.$4,500,000

Question 2: And what is the target mark-up rate based on the manufacturing-cost in long-run pricing?

A.211.3%
B.223.9%
C.18.7%
D.17.6%

Reference no: EM132548828

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