Question

Exercise 8-7 (Video) Gibbs Corporation produces industrial robots for high-precision manufacturing. The following information is given for Gibbs Corporation. Total Per Unit $400 $310 $ 75 Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling and administrative expenses Fixed selling and administrative expenses $1,863,900 $ 56 $ 493,770 The company has a desired ROI of 24%. It has invested assets of $50,031,000. It anticipates production of 3,270 units per year. Compute the cost per unit of the fixed manufacturing overhead and the fixed selling and administrative expenses. Fixed manufacturing overhead per unit Fixed selling and administrative expenses per unit LINK TO TEXT LINK TO VIDEO Compute the desired ROI per unit. ROL per unit LINK TO TEXT

Answer 1

1
Fixed manufacturing overhead	570	per unit	=1863900/3270
Fixed selling and administrative expenses	151	per unit	=493770/3270
2
ROI	3672	per unit	=(50031000*24%)/3270
3
Variable cost per unit	841		=400+310+75+56
Fixed cost per unit	721		=570+151
ROI per unit	3672
Target selling price	5234