Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Problem 8-2A (Video) Lovell Computer Parts Inc. Is in the process of setting a selling price on a new component it has just designed and
Problem 8-2A (Video) 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 45,000 units Per Unit Total Direct materials $49 Direct labor $22 Variable manufacturing averhead $23 Fixed manufacturing averhead $540,000 Varlable selling and administrative expenses $22 Fixed selling and administrative expenses $405,000 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 18 % return on investment (ROI) assets of s1,000,000 invested Campute the markup percentage and target selling price that will allaw Lovell Camputer Parts to earn its desired ROI of 18% on this new camponent. (Round markup percentage to 2 decimal places, e.g. 10.50 % .) Markup percentage Target selling price Assuming that the volume Is 36,000 units, compute the markup percentage and target sell ng price that will allow Lovell Computer Parts to eam Its desired ROI of 18 % on this new component. (Round answers to 2 declmal places, e.g. 10.50% or 10.50.) Markup percentage Target selling price Click if you would like to Show Work for this question: Onen Show Work
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started