Problem Data

XYZ Co. uses the product cost concept of applying the cost-plus approach to product pricing. The costs of producing and selling 10,000 units are as follows:

XYZ desires profit equal to a 30% rate of return on invested assets of $1,200,000.

Variable Costs per unit:			Fixed costs:
Direct materials	$ 150		Factory Overhead		$ 350,000
Direct labor	25		Selling & admin. expense		$ 140,000
Factory overhead	40
Selling & Admin expense	25
Total	$ 240

Calculations

1. Compute the product cost and the cost per unit.

Variable Costs?

enter a formula to compute the answer in yellow cells

Fixed Costs?

enter data in blue cells

Total Product Cost?

Cost per unit?

2. Compute the amount of desired profit

____________________________________

3. Compute the markup percentage

Desired Profit?

Total variable selling & admin exp.?

Total fixed selling & admin exp.?

Total Product Cost?

Markup Percentage?

4. Compute the normal selling price

Product Cost per unit?

Markup percentage?

Markup per Unit?

Normal Selling Price?