Class Activity Ch. 8&9 Fall 2018-2019 Question I Lovell 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 50,000 units. Per Unit 50 $26 $20 Total Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead . Fixed selling and administrative expenses $600,000S $400,000 Varable selling and administrative expenses $19 Lovell Computer Parts management requests that the total cost per unit be used in cost-plus pricing its produets, On this particular product, management also directs that the target price be set to providea(25% return on investment (ROI) on invested assets of $1,000, Instructions (a) Compute the markup percentage and target selling price that will allow Lovell Computer parts to earn its desired ROI of 25%on this new component b) Assuming that the volume i s 40,000 anits, compute the markup percentage and target selling price that will allow Lovell Computer Parts to earn its desired ROI of 25% on this new component. Class Activity Ch. 8&9 Fall 2018-2019 Question I Lovell 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 50,000 units. Per Unit 50 $26 $20 Total Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead . Fixed selling and administrative expenses $600,000S $400,000 Varable selling and administrative expenses $19 Lovell Computer Parts management requests that the total cost per unit be used in cost-plus pricing its produets, On this particular product, management also directs that the target price be set to providea(25% return on investment (ROI) on invested assets of $1,000, Instructions (a) Compute the markup percentage and target selling price that will allow Lovell Computer parts to earn its desired ROI of 25%on this new component b) Assuming that the volume i s 40,000 anits, compute the markup percentage and target selling price that will allow Lovell Computer Parts to earn its desired ROI of 25% on this new component