Williams Inc. produces a single product, a part used in the manufacture of automobile transmissions. Known for its quality and performance, the part is sold to luxury auto manufacturers around the world. Because this is a quality product, Williams has some flexibility in pricing the part. The firm calculates the price using a variety of pricing methods and then chooses the final price based on that information and other strategic information. A summary of the key cost information follows. Williams expects to manufacture and sell 56,000 parts in the coming year. While the demand for Williams's part has been growing in the past 2 years, management is not only aware of the cyclical nature of the automobile industry, but also concerned about market share and profits during the industry's current downturn. Variable manufacturing Variable selling and administrative Facility-level fixed overhead Fixed selling and administrative Batch-level fixed overhead Total investment in product line Expected sales (units) Total Costs $ 4,668,000 843,650 2,333, 875 663,495 348,000 22,338,000 56,000 Required: 1. Determine the price for the part using a markup of 37% of full manufacturing cost. 2. Determine the price for the part using a markup of 25% of full life-cycle cost. 3. Determine the price for the part using a desired gross margin percentage to sales of 35%. 4. Determine the price for the part using a desired life-cycle cost margin percentage to sales of 28%. 5. Determine the price for the part using a desired before-tax return on investment of 13%. 6. Determine the total contribution margin and total operating profit for each of the methods in requirements 1 through 5. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 Determine the price for the part using a markup of 37% of full manufacturing cost. (Do not round intermediate calculations. Round your answer to 4 decimal places.) Price per unit Required 1 Required 2 > Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 Determine the price for the part using a markup of 25% of full life-cycle cost. (Do not round intermediate calculations. Round your answer to 4 decimal places.) Price per unit Required 1 Required 3 > Required 1 Required 2 Required 31 Required 4 Required 5 Required 6 Determine the price for the part using a desired gross margin percentage to sales of 35%. (Round your intermediate calculations and answer to 4 decimal places.) Price per unit Required 2 Required 4 > Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 Determine the price for the part using a desired life-cycle cost margin percentage to sales of 28%. (Round your intermediate calculations and answer to 4 decimal places.) Price per unit Required 3 Required 5 ) Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 Determine the price for the part using a desired before-tax return on investment of 13%. (Round your intermediate calculations and answer to 4 decimal places.) Price per unit Required 4 Required 6 > Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 Determine the total contribution margin and total operating profit for each of the methods in requirements 1 through 5. (Round your intermediate calculations to 4 decimal places and final answers to the nearest whole dollar amount.) Method Contribution Margin Operating Profit Markup on full manufacturing cost Markup on life cycle costs Price to achieve desired GM % Price to achieve desired LCC % Price to achieve desired ROA of 13%
