Question
Crane Products desires to set a target price for its newest product. Information for a budgeted volume of 8,000 units is shown below. Per
Crane Products desires to set a target price for its newest product. Information for a budgeted volume of 8,000 units is shown below. Per Unit Total Direct materials $ 136 Direct labor $ 86 Variable manufacturing overhead $ 61 Fixed manufacturing overhead $ 50,000 Variable selling and administrative expenses $ 35 Fixed selling and administrative expenses $ 70,000 Crane Products uses cost-plus pricing and management wants a 25% ROI on the new product. Assets of $1,400,000 are committed to production of the new product. (a) Your answer is incorrect. Compute the markup percentage under variable costing that will allow Crane Products its desired ROI. (Round answer to 2 decimal places, e.g. 10.50%) Markup Percentage |%
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