National Corporation needs to set a target price for its newly designed product M14M16. The following data relate to this new product.

	Per Unit	Total
Direct materials	$25
Direct labor	40
Variable manufacturing overhead	10
Fixed manufacturing overhead		$1,440,000
Variable selling and administrative expenses	5
Fixed selling and administrative expenses		960,000

These costs are based on a budgeted volume of 80,000 units produced and sold each year. National uses cost-plus pricing methods to set its target selling price. The markup percentage on total unit cost is 40%.

Instructions

1. Compute the total unit variable cost, total unit fixed cost, and total unit cost for M14M16.

   a. Unit variable cost $80

2. Compute the desired ROI per unit for M14M16.
3. Compute the target selling price for M14M16.
4. Compute unit variable cost, unit fixed cost, and unit total cost assuming that 60,000 M14M16s are produced and sold during the year.