Crane 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 45,000 units.

		Per Unit				Total
Direct materials			$ 45
Direct labor			$ 20
Variable manufacturing overhead			$ 15
Fixed manufacturing overhead						$ 450,000
Variable selling and administrative expenses			$ 13
Fixed selling and administrative expenses						$ 225,000

Crane Computer Parts management requests that the total cost per unit be used in cost-plus pricing its products. On this particular product, management also directs that the target price be set to provide a 18% return on investment (ROI) on invested assets of $ 1,000,000.

(a)

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Your answer is correct.

Compute the markup percentage and target selling price that will allow Crane Computer Parts to earn its desired ROI of 18% on this new component. (Round markup percentage to 2 decimal places, e.g. 10.50%.)

Markup percentage			%
Target selling price		$

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(b)

Assuming that the volume is 36,000 units, compute the markup percentage and target selling price that will allow Crane Computer Parts to earn its desired ROI of 18% on this new component. (Round answers to 2 decimal places, e.g. 10.50% or 10.50.)

Markup percentage			%
Target selling price		$