Rita Corporation produces commercial fertilizer spreaders. The following information is available for Rita's anticipated annual volume of 600,000 units:

Per Unit Total

Direct materials $37

Direct labour 43

Variable manufacturing overhead 65

Fixed manufacturing overhead $15,000,000

Variable selling and administrative expenses 73

Fixed selling and administrative expenses 11,400,000

The company has a desired ROI of 20%. It has invested assets of $325,000,000.

Instructions

Calculate each of the following:

a) Total cost per unit.

b) Desired ROI per unit.

c) Mark-up percentage using total cost per unit.

d) Target selling price.