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P8.1A (LO 2), AP National Corporation needs to set a target price for its newly designed product M14-M16. The following data relate to this new
P8.1A (LO 2), AP National Corporation needs to set a target price for its newly designed product M14-M16. The following data relate to this new product. Use cost-plus pricing to determine various amounts. Per Unit Total Excel 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 a. Variable cost per unit $80 a. Compute the total variable cost per unit, total fixed cost per unit, and total cost per unit for M14-M16. b. Compute the desired ROI per unit for M14-M16. c. Compute the target selling price for M14-M16. d. Compute variable cost per unit, fixed cost per unit, and total cost per unit assuming that 60,000 M14-M16s are produced and sold during the year
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