National Corporation needs to set a target price for its newly designed product M14-M16. The following data relate to this new product.

These costs are based on a budgeted volume of 80,000 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 40%.
Instructions
(a) Compute the total variable cost per unit, total fixed cost per unit, and total cost per unit for M14-M16.
(b) Compute the desired ROI per unit for M14-M16.
(c) Compute the target selling price for M14-M16.
(d) Compute variable cost per unit, fixed cost per unit, and total cost per unit assuming that 60,000 M14-M16s are produced and sold during the year.

Transcribed Image Text:

Per Unit S25 $40 $10 Total Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling and administrative expenses Fixed selling and administrative expenses $1,440,000 S 5 $ 960,000