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Clear Water is considering introducing a water filtration device for its one-litre water bottles. Market research indicates that 1,000,000 units can be sold if the
Clear Water is considering introducing a water filtration device for its one-litre water bottles. Market research indicates that 1,000,000 units can be sold if the price is no more than $5. If Clear Water decides to produce the filters, it will need to invest $2,000,000 in new production equipment. Clear Water requires a minimum rate of return of 15% on all investments. Determine the target cost per unit for the filter. (Round answer to 2 decimal places, e.g. 15.25.) 2 Target cost per unit $ Caan Corporation produces industrial robots for high-precision manufacturing. The following information is given for Caan Corporation: Total Per Unit $375 270 70 Direct materials Direct labour Variable manufacturing overhead Fixed manufacturing overhead Variable selling and administrative expenses Fixed selling and administrative expenses $1,450,000 50 250,000 The company has a desired ROI of 15%. It has invested assets of $50,000,000. It expects to produce 2,500 units each year. (a) Your answer is correct. Calculate the cost per unit of the fixed manufacturing overhead and the fixed selling and administrative expenses. 580 per unit Fixed manufacturing overhead 100 per unit Fixed selling and administrative SHOW SOLUTION LINK TO TEXT (b) Your answer is correct. Calculate the desired ROI per unit. 3000 Desired ROI per unit SHOW SOLUTION LINK TO TEXT x Your answer is incorrect. Try again. Calculate the target selling price. X 253765 Target selling price LINK TO TEXT
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