Question

National 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		$23
Direct labor		$38
Variable manufacturing overhead		$12
Fixed manufacturing overhead					$1,343,000
Variable selling and administrative expenses		$ 7
Fixed selling and administrative expenses					$ 1,027,000

These costs are based on a budgeted volume of 79,000 units produced and sold each year. National uses cost-plus pricing methods to set its target selling price. The markup percentage on total unit cost is 50%.

Compute the total variable cost per unit, total fixed cost per unit, and total cost per unit for M14–M16.

Variable cost per unit		$enter a dollar amount
Fixed cost per unit		enter a dollar amount
Total cost per unit		$enter a total of the two previous amounts

eTextbook and Media

Compute the desired ROI per unit for M14–M16.

Desired ROI

$enter the desired ROI per unit in dollars

per unit

eTextbook and Media

Compute the target selling price for M14–M16.

Target selling price per unit

$enter the target selling price per unit in dollars

eTextbook and Media

Compute variable cost per unit, fixed cost per unit, and total cost per unit assuming that 59,250 M14–M16s are produced and sold during the year.

Variable cost per unit		$enter a dollar amount
Fixed cost per unit		enter a dollar amount
Total cost per unit		$enter a total of the two previous amounts

Answer 1

В2 а A В D Е F 1 $80 total variable cost per unit $23 $38 + $12 + $ 7 = a 2 total fixed cost per unit ($1,343,000 $1,027,000) 79,000 3 total fixed cost per unit $2,370,000 79,000 $30 4 $110 total cost per unit = $80 + $30 = 5 6 $55 desired ROI per unit $110* 50% = b per unit 7 target selling price $110 $55 $165 9 10 $ 80 total variable cost per unit $23 $38 + $12 $ 7 d 11 total fixed cost per unit ($1,343,000 $1,027,000) /59,250 12 $ 40 total fixed cost per unit $2,370,000 59,250 13 $120 total cost per unit $80 $40= 14 15 LL co Ln

for formulas and calculations, refer to the image below -

В2 а А C D 1 a total variable cost per unit $23 + $38 + $12 $ 7 = -23+38+12+7 2 total fixed cost per unit ($1,343,000 $1,027,000) /79,000 3 =2370000/79000 total fixed cost per unit $2,370,000 79,000 4 total cost per unit = $80 + $30 = D2+D4 5 6 desired ROI per unit $110* 50% = = 110*50% b per unit 7 target selling price $110 $55 110+55 C 10 d total variable cost per unit = $23 + $38 + $12 $ 7 ==23+38+12+7 11 total fixed cost per unit ($1,343,000 $1,027,000) /59,250 12 total fixed cost per unit $2,370,000 / 59,250 -2370000/59250 13 total cost per unit $80 $40 = D11+D13 14 15 LL ш

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