Sheffield Computer Parts Inc. is in the process of setting a selling price on a new component it has just designed and developed. The following cost estimates for this new component have been provided by the accounting department for a budgeted volume of 55,000units.

		Per Unit				Total
Direct materials			$40
Direct labor			$21
Variable manufacturing overhead			$16
Fixed manufacturing overhead						$660,000
Variable selling and administrative expenses			$15
Fixed selling and administrative expenses						$440,000

Sheffield Computer Parts management requests that the total unit cost be used in cost-plus pricing its products. On this particular product, management also directs that the target price be set to provide a 25% return on investment (ROI) on invested assets of $1,100,000.

(a)

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Compute the markup percentage and target selling price that will allow Sheffield Computer Parts to earn its desired ROI of 25% on this new component. (Round markup percentage to 2 decimal places, e.g. 10.50%.)

Markup percentage		enter percentages rounded to 2 decimal places	%
Target selling price		$enter a dollar amount

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(b)

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Assuming that the volume is 44,000 units, compute the markup percentage and target selling price that will allow SheffieldComputer Parts to earn its desired ROI of 25% on this new component. (Round answers to 2 decimal places, e.g. 10.50% or 10.50.)

Markup percentage		enter percentages rounded to 2 decimal places	%
Target selling price		$enter a dollar amount rounded to 2 decimal places

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