A company manufactures a unique small appliance that can make a variety of coffee drinks. It has invested assets of $5,500,000 and anticipates production of 10,000 units a year. The desired ROI is 15%.

Below is the cost information for the appliance.

Answer the following questions based on the data above using Cost-Plus pricing approach: Round all amounts and ratios to whole numbers 1. Compute the total cost per unit to manufacture the appliance (4 pts) 2. Compute the Desired ROI in total. (4 pts) 3. Compute the Desired ROI per unit. (4 pts) 4. Compute the Mark-Up percentage required to meet the desired ROI. (5 pts) 5. Compute the Target Price per unit. (5 pts) 6. What would first months sales be if they sold 1,000 units? (3 pts)

Instructions: Show all calculations for each item, by numbering your answers.

\begin{tabular}{|c|c|c|} \hline & Per Units & Total \\ \hline Direct Material & $25 & \\ \hline Direct Labor & $12 & \\ \hline Variable Manuf. Overhead & $15 & \\ \hline Fixed Manuf. Overhead & & $310,000 \\ \hline Variable Selling \& Administrative & $5 & \\ \hline Fixed Selling \& Administrative & & $420,000 \\ \hline \end{tabular} \begin{tabular}{|c|c|c|} \hline & Per Units & Total \\ \hline Direct Material & $25 & \\ \hline Direct Labor & $12 & \\ \hline Variable Manuf. Overhead & $15 & \\ \hline Fixed Manuf. Overhead & & $310,000 \\ \hline Variable Selling \& Administrative & $5 & \\ \hline Fixed Selling \& Administrative & & $420,000 \\ \hline \end{tabular}