Question
Crane Inc. produces and sells yo-yos. It is currently planning to launch a new glow-in-the-dark model. The following are the projected costs based on projected
Crane Inc. produces and sells yo-yos. It is currently planning to launch a new glow-in-the-dark model. The following are the projected costs based on projected units sold of 100,000.
Variable costs per unit: | ||
Direct materials | $1.40 | |
Direct labour | 1.10 | |
Variable manufacturing overhead | 1.45 | |
Variable selling and administrative expenses | 2.15 |
Annual fixed costs and expenses: | ||
Manufacturing overhead | $50,000 | |
Selling and administrative expenses | 35,000 |
Crane Inc. will invest $1,000,000 for this new launch and would like to earn a 28% return on its investment. The old model of yo-yo sells for $8.83.
Calculate the total cost per yo-yo. (Round answer to 2 decimal places, e.g. 15.25.)
Total cost | $enter the total cost per yo-yo in dollars | per yo-yo |
Determine the desired ROI per yo-yo. (Round answer to 2 decimal places, e.g. 15.25.)
Desired ROI | $enter the desired return on investment per yo-yo in dollars | per yo-yo |
Calculate the markup percentage on the total cost per yo-yo. (Round answer to 2 decimal places, e.g. 15.25%.)
Markup percentage | enter the markup percentage on the total cost per yo-yo | % |
Calculate the target price per yo-yo. (Round answer to 2 decimal places, e.g. 15.25.)
Target price | $enter the target price per yo-yo in dollars | per yo-yo |
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Solution 1 The Total Cost per yoyo Answer Total Cost 695 per yoyo Working Direct ma...Get Instant Access to Expert-Tailored Solutions
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