Widemess Products, incorporated, has designed a self-inflating sleeping pad for use by backpackers and campers. The following information is available about the new product a. An investment of $1,350,000 will be necessary to carry inventories and accounts receivable and to purchase some new equipment needed in the manufacturing process. The company's required rate of return is 24% on all investments. b. A standard cost card has been prepared for the sieeping pad, as shown below. C. The oniy variable selling and administrative expense wil be a sales commission of $8 per pad. The fixed selling and administrative expenses will be $4,564,320 per year. d Because the company manufactures many products, no more than 172.800 direct labor-hours per year can be devoted to production of the new sleeping pads e. Manufoctuning overhead costs are allocated to products on the basis of direct labor-hours: Required: 1 Assume that the company uses the absorption approach to cost-plus pricing. a. Compute the markup percentage that the company needs on the pads to achieve a 24% retum on irvestment (ROI) if it sells all of the pads in can produce b. What selling price per sleeping pad will the company establish if it uses a markup percentage on absorption cost? (Round intermediot calculations and final answer to 2 decimal ploces.d activity A if can produce. Compute the company's ROI based on the first year of A latge retai outiet will make pads for several years, the company is experiencing a falloff in demand due to an economic recession. minimum acceptable price for this special order? padsound your if is sewn in and if an acceptable price can be worked out What is the Widemess Products, incorporated, has designed a self-inflating sleeping pad for use by backpackers and campers. The following information is available about the new product a. An investment of $1,350,000 will be necessary to carry inventories and accounts receivable and to purchase some new equipment needed in the manufacturing process. The company's required rate of return is 24% on all investments. b. A standard cost card has been prepared for the sieeping pad, as shown below. C. The oniy variable selling and administrative expense wil be a sales commission of $8 per pad. The fixed selling and administrative expenses will be $4,564,320 per year. d Because the company manufactures many products, no more than 172.800 direct labor-hours per year can be devoted to production of the new sleeping pads e. Manufoctuning overhead costs are allocated to products on the basis of direct labor-hours: Required: 1 Assume that the company uses the absorption approach to cost-plus pricing. a. Compute the markup percentage that the company needs on the pads to achieve a 24% retum on irvestment (ROI) if it sells all of the pads in can produce b. What selling price per sleeping pad will the company establish if it uses a markup percentage on absorption cost? (Round intermediot calculations and final answer to 2 decimal ploces.d activity A if can produce. Compute the company's ROI based on the first year of A latge retai outiet will make pads for several years, the company is experiencing a falloff in demand due to an economic recession. minimum acceptable price for this special order? padsound your if is sewn in and if an acceptable price can be worked out What is the
