only need the answer to part b

answers for part a are - markup percentage 4.95% target selling price - 136.43

Problem 22-2A (Part Level Submission)

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 50,000 units.

Per Unit Total Direct materials $ 45 Direct labor $ 29 Variable manufacturing overhead $ 20 Fixed manufacturing overhead $ 750,000 Variable selling and administrative expenses $ 13 Fixed selling and administrative expenses $ 400,000

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 26 % return on investment (ROI) on invested assets of $ 1,236,600 .

[Collapse question part]

(a)

[Correct answer.] Your answer is correct.

Compute the markup percentage and target selling price that will allow Lovell Computer Parts to earn its desired ROI of 26 % on this new component. (Round answers to 2 decimal places, e.g. 10.50.)

Markup percentage [Entry field with correct answer] % Target selling price $ [Entry field with correct answer]

SHOW SOLUTION SHOW ANSWER LINK TO TEXT

Attempts: 1 of 3 used

[Collapse question part]

(b)

Assuming that the volume is 38,800 units, compute the markup percentage and target selling price that will allow Lovell Computer Parts to earn its desired ROI of 26 % on this new component. (Round answers to 2 decimal places, e.g. 10.50.)

Markup percentage % Target selling price $