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ANAGEMENT ACCOUNTING 2 7 June 2022 setting a target price for this new product. Given below is the cost data relating to the budgeted Gegar
ANAGEMENT ACCOUNTING 2 7 June 2022 setting a target price for this new product. Given below is the cost data relating to the budgeted Gegar Berjaya is going to introduce its newly designed motor scooter and is in the process of volume of 20,000 units of scooters. Per Unit (RM) Total (RM) Direct materials Direct labour Variable manufacturing overhead Fixed manufacturing overhead Variable selling and administrative expenses Fixed selling and administrative expenses 200 100 30 20 1,400,000 200,000 This company would like to gain 25% ROI on its motor scooter line by using cost-plus pricing method. A total of RM20,000,000 in assets is committed to production of the new motor scooter. Required: a) Compute the markup percentage under variable-cost pricing that will allow Gegar Berjaya to realize its desired ROI. b) Compute the target price of the motor scooter under variable-cost pricing. (4 marks) (1 mark) E) Compute the markup percentage under absorption-cost pricing that will allow Gegar Berjaya to realize its desired ROI. (4 marks) O Compute the target price of the motor scooter under absorption-cost pricing. (1 mark) Since both the absorption-cost pricing and variable-cost pricing produce the same target price and provide the same desired ROI, why do both methods exist
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