Question
Bramble Computer Parts Inc. is in the process of setting a selling price on a new component it has just designed and developed. The following
Bramble Computer Parts Inc. is in the process of setting a selling price on a new component it has just designed and developed. The following cost estimates for this new component have been provided by the accounting department for a budgeted volume of 64,000 units.
Per Unit | Total | ||||||
---|---|---|---|---|---|---|---|
Direct materials | $44 | ||||||
Direct labor | $25 | ||||||
Variable manufacturing overhead | $20 | ||||||
Fixed manufacturing overhead | $768,000 | ||||||
Variable selling and administrative expenses | $19 | ||||||
Fixed selling and administrative expenses | $512,000 |
Bramble Computer Parts management requests that the total unit cost be used in cost-plus pricing its products. On this particular product, management also directs that the target price be set to provide a 25% return on investment (ROI) on invested assets of $1,280,000.
Compute the markup percentage and target selling price that will allow Bramble Computer Parts to earn its desired ROI of 25% on this new component. (Round markup percentage to 2 decimal places, e.g. 10.50%.)
Markup percentage | enter percentages rounded to 2 decimal places | % | |
---|---|---|---|
Target selling price | $enter a dollar amount |
eTextbook and Media
Assuming that the volume is 51,200 units, compute the markup percentage and target selling price that will allow Bramble Computer Parts to earn its desired ROI of 25% on this new component. (Round answers to 2 decimal places, e.g. 10.50% or 10.50.)
Markup percentage | enter percentages rounded to 2 decimal places | % | |
---|---|---|---|
Target selling price | $enter a dollar amount rounded to 2 decimal places |
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