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Jesse Custom Machinery needs to set a target price for its new product. The following costs are for the production of 80,000 units. Per unit
Jesse Custom Machinery needs to set a target price for its new product. The following costs are for the production of 80,000 units. Per unit Total DM 20 DL $ 40 VMOH $ 10 FMOH $ 1,400,000 VS&A $ 5 FS&A $ 1,120,000 Donnie has invested $1 million and expects an ROI of 18%. Required: a) Calculate the profit Donnie wants per unit. (2 marks) b) Calculate the markup on the total cost. (2 marks) c) Calculate the markup on the absorption cost. (3 marks) d) Calculate the markup on the variable cost. (3 marks) e) Calculate the target selling price using each markup
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