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Victory company is in the process of setting a target price on its new product. Cost data relating to the product at a budgeted
Victory company is in the process of setting a target price on its new product. Cost data relating to the product at a budgeted volume of 6,000 units are as follows: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling and administrative cost Fixed selling and administrative expenses Per Unit $110 $100 $15 $10 Total $120,000 $102,000 Victory uses cost-plus pricing methods that are designed to provide the company with a 30% ROI on its asset investment of $1,360,000. Required: a. Compute the markup percentage on total costs that will allow the company to achieve its desired ROI. b. Compute the markup percentage on total marginal costs that will allow the company to get its desired ROI.
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