ROBLEM VI: 14 POINTS

The costs and expenses for Sun Company of producing and selling 150,000 units of Product R are as follows: (Show all your work)

Variable costs:
Direct materials	$14.00
Direct labor	7.00
Factory overhead	3.00
Selling and administrative expenses	6.00
Total	$30.00
Fixed costs:
Factory overhead	$90,000
Selling and administrative expenses	40,000

Sun desires a profit equal to an 18% rate of return on invested assets of $2,880,000.

REQUIRED:

(1)Using Variable Cost Concept of applying the cost-plus approach to product pricing:

(a)	Determine the amount of desired profit from the production and sale of Product R.
(b)	Determine the total variable costs for the production and sale of 150,000 units of Product R.
(c)	Determine the markup percentage for Product R.
(d)	Determine the unit selling price of Product R.

Round your markup percentage to one decimal place and other intermediate calculations and final answer to two decimal places.

(2)Using Total Cost Concept:

(a) Determine the markup percentage for Product R. (Round your markup percentage to one decimal place and other intermediate calculations and final answer to two decimal places.)

(3)Using the Product Cost Concept,

(a) Determine the markup percentage for Product R. (Round your markup percentage to one decimal place and other intermediate calculations and final answer to two decimal places.)