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Evergreen Construction provides home renovation services. The company anticipates 800 projects annually. They have invested $2,000,000 in their facilities and expect an ROI of 18%.
Evergreen Construction provides home renovation services. The company anticipates 800 projects annually. They have invested $2,000,000 in their facilities and expect an ROI of 18%. The budgeted costs for the coming year are shown below:
Cost Item | Per Project ($) | Total ($) |
---|---|---|
Direct Materials (Supplies) | 500 | 400,000 |
Direct Labor (Workers) | 1,000 | 800,000 |
Variable Overhead | 200 | 160,000 |
Fixed Overhead | - | 400,000 |
Variable Selling & Admin Expenses | 100 | 80,000 |
Fixed Selling & Admin Expenses | - | 160,000 |
Required:
- Calculate the total cost per project.
- Determine the desired ROI per project.
- Compute the target price per project.
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