Q. 6 (10 marks)

ABC Corporation makes a mechanical device for material handling. The following information is available for the company's anticipated annual volume of 600,000 units.

Per unit

Direct Materials $8 Direct Labour $15 Variable MOH $18 Fixed MOH

Variable S&A Expenses $16 Fixed S&A Expenses

Total

$3,500,000 $1,500,000

The company has a desired ROI of 30%. It has invested assets of $30,000,000

Required:

Compute the total cost per unit (2 mark)

Compute the desired ROI per unit (2 marks)

Compute the target selling price (1 mark)

the mark-up percentage using variable cost per unit (5 marks)