1- Eckert Company is involved in producing and selling high-end golf equipment. The company has recently been involved in developing various types of laser guns to measure yardages on the golf course. One small laser gun, called LittleLaser, appears to have a very large potential market. Because of competition, Eckert does not believe that it can charge more than $93 for LittleLaser. At this price, Eckert believes it can sell 103,000 of these laser guns. Eckert will require an investment of $7,725,000 to manufacture, and the company wants an ROI of 20%.

Determine the target cost for one LittleLaser.

2- Jaymes Corporation produces high-performance rotors. It expects to produce 46,000 rotors in the coming year. It has invested $9,200,000 to produce rotors. The company has a required return on investment of 16%. What is its ROI per unit?

Determine the target cost for one LittleLaser.

Target cost ?

3 - Jaymes Corporation produces high-performance rotors. It expects to produce 46,000 rotors in the coming year. It has invested $9,200,000 to produce rotors. The company has a required return on investment of 16%. What is its ROI per unit?

4- Morales Corporation produces microwave ovens. The following per unit cost information is available: direct materials $39, direct labor $30, variable manufacturing overhead $13, fixed manufacturing overhead $46, variable selling and administrative expenses $14, and fixed selling and administrative expenses $28. Its desired ROI per unit is $30.60. Compute its markup percentage using a total-cost approach. (Round answer to 2 decimal places, e.g. 10.50%.)

Markup percentage ?

5 - During the current year, Chudrick Corporation expects to produce 9,000 units and has budgeted the following: net income $216,000, variable costs $988,000, and fixed costs $92,000. It has invested assets of $1,080,000. The companys budgeted ROI was 20%. What was its budgeted markup percentage using a full-cost approach?

Markup % ?

6- Almas Recording Studio rents studio time to musicians in 2-hour blocks. Each session includes the use of the studio facilities, a digital recording of the performance, and a professional music producer/mixer. The anticipated annual volume is 1,190 sessions. The company has invested $2,356,200 in the studio and expects a return on investment (ROI) of 20%. Budgeted costs for the coming year are as follows.

		Per Session			Total
Direct materials (CDs, etc.)		$ 20
Direct labor		$415
Variable overhead		$ 50
Fixed overhead					$1,130,500
Variable selling and administrative expenses		$ 45
Fixed selling and administrative expenses					$595,000

Total cost ?

ROI ?

Markup percentage?

Target price?