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. Direct
Crane Products desires to set a target price for its newest product. Information for a budgeted volume of 8,000 units is shown below. Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling and administrative expenses Fixed selling and administrative expenses Per Unit $ 136 $86 $ 61 $ 35 Total $ 50,000 $ 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. Compute the target price of the new product under variable-cost pricing. (Round answer to 2 decimal places, e.g. 10.50.)
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