1. Rita Corporation produces commercial fertilizer spreaders. The following information is available for Rita's anticipated annual volume of 400,000 units.

Per Unit Total

Direct materials $42

Direct labor 54

Variable manufacturing overhead 72

Fixed manufacturing overhead $12,000,000

Variable selling and administrative expenses 84

Fixed selling and administrative expenses 7,200,000

The company has a desired ROI of 25%. It has invested assets of $144,000,000.

Instructions

Compute each of the following:

1. Total cost per unit.

2. Desired ROI per unit.

3. Target selling price.