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Gerber Clothing Inc. has designed a rain suit for outdoor enthuslasts that is about to be introduced on the market. A standard cost card has

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Gerber Clothing Inc. has designed a rain suit for outdoor enthuslasts that is about to be introduced on the market. A standard cost card has been prepared for the new sult, as follows: a. The only variable selling and administrative costs will be $6 per sult for shipping. Fixed selling and adihinistrative costs will be as follows (per year): b. Since the company manufactures many products, it is felt that no more than 11,400 hours of labour time per year can be devoted to production of the new sults. c. An investment of $640.000 will be necessary to carry inventories and accounts recelvable and to purchase some new equipment. The momnanw wante a ink pot in now rendiet lines follows (per yeat): b. Since the company manufactures many products, it is felt that no more than 11,400 hours of labour time per year can be devoted t production of the new suits. c. An investment of $640,000 will be necessary to carry inventories and accounts recelvable and to purchase some new equipment. The company wants a 20% ROI in new product lines. d. Manufacturing overhead costs are allocated to products on the basis of direct labour-hours. Required: 1. Assume that the company uses the absorption approach to cost-plus pricing. a. Compute the markup that the company needs on the rain suits to achieve a 20% ROI if it sells all of the suits it can produce using 11,400 hours of labour time. Answer is complete but not entirely correct. b. Using the markup you have computed, prepare a price quote sheet for a single rain suit. (Round your answers to 2 docimal places.) c-1. Assume that the company is able to sell all of the rain suits that it can produce. Prepare an income statement for the activity. c-2. Compute the company's ROI for the year on the suits, using the ROI formula. (Do not round intermediate calculations.) Answer is complete and correct. 2001% 2. Repeat requirements 1a and 1b above, assuming that the company uses the total varlable costing approach to cost-plus pricing. (Do not round intermediate calculations. Round your answers to 2 decimal places.) Answer is complete but not entirely correct

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