5 2.00 C) Industries wants to set the price for a new product (garden statues) to their line of 6 products. The accountine department has provided the following cost estimates: 7 8 Per Unit Total 9 Direct Materials 6.00 10 Direct Labour 4.00 11 Variable Manufacturing Overhead 3.00 12 Fixed Manufacturing Overhead 70,000 13 Variable selling & admin 4 Fixed selling & admin 60,000 5 Units Per Year 10,000 6 Desired ROI 20% 7 Invested Assets 2,000,000 8 9 a. Calculate cost per unit of fixed manufacturing overhead and fixed selling and administrative expenses. (3 marks) What is the Fixed Manufacturing Overhead costs per unit ANWSER What is the Fixed Selling & Admin costs per unit ANWSER 5 Working Space 2 b. Calculate the Return on investment (ROI) per unit. (1 marks) What is the ROI per unit? ANWSER Working Space 46 47 c. Calculate selling price for C's new product assuming this will be sold in a competitive market and 48 therefore will have to use Target Cost Pricing method. (3 marks) 49 What are the total costs per unit? ANWSER 50 51 What is the target selling price? ANWSER 52 53 Working Space 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 d. Calculate the selling price for Ci's new product assuming this will be sold in a non-competitive 77 market and they will choose the Absorption cost plus Pricing method. (5 mars) 78 What cost base per unit? ANWSER 79 50 What is the mark-up % ANWSER 81 82 What is the target selling price? ANWSER 83 84 Working Space 85 86 87 88 90 91 92 93 94 106 107 e. Calculate selling price for Cl's new product assuming this will be sold in a non-competitive market 108 and they will choose the Variable cost-plus Pricing method. (5 marks) 109 What cost base per unit? ANWSER 110 111 What is the mark-up % ANWSER 112 113 What is the target selling price? ANWSER 114 115 Working Space 116 + 117 118 119 120 121 122 123 124 125 126 127 128 129 130 131 132 133 134 135