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Lovell Computer Parts Inc. is in the process of setting a selling price on a new component it has just designed and developed. The following
Lovell Computer Parts Inc. is in the process of setting a selling price on a new component it has just designed and developed. The following cost estimates for this new component have been provided by the accounting department for a budgeted volume of 46,000 units.
Lovell Computer Parts Inc. is in the process of setting a selling price on a new component it has just designed and developed. The following cost estimates for this new component have been provided by the accounting department for a budgeted volume of 46,000 units Per Unit $ 46 $ 22 $ 21 Total Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling and administrative expenses Fixed selling and administrative expenses $506,000 $ 21 $ 322,000 Lovell Computer Parts management requests that the total cost per unit be used in cost-plus pricing its products. On this particular product, management also directs that the target price be set to provide a 24 % return on investment (ROI) on invested assets of $ 1,183,000 (a) Your answer is correct. Compute the markup percentage and target selling price that will allow Lovell Computer Parts to earn its desired ROI of 24 % on this new component. (Round answers to 2 decimal places, e.g. 10.50.) Markup percentage Target selling price 4.827o 134.17Step by Step Solution
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