Problem 22-1A (Part Level Submission) Dewitt Corpor this new product. ration nee

Question

Problem 22-1A (Part Level Submission) Dewitt Corpor this new product. ration needs to set a target price for its newly designed product M14-M16. The following data relate to Per Unit $17 $44 $15 Total Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling and administrative expenses Fixed selling and administrative expenses $1,423,800 $8 $949,200 These costs are based on a budgeted volume of 79,100 units produced and sold each year. Dewitt uses cost-plus pricing methods to set its target selling price. The markup percentage on total unit cost is 31%. Y (a) Compute the total variable cost per unit, total fixed cost per unit, and total cost per unit for M14-M16. Variable cost per unit Fixed cost per unit s Total cost per unit$

Explanation / Answer

A)

1) Variable Cost Per Unit :-

2) Total Fixed Cost Per Unit :-

Total Cost Per Unit :-

= Total Variable Cost Per Unit + Total Fixed Cost Per Unit

= $84 + $30

= $114

Calculation of Desired ROI Per Unit :-

Target Selling Price Per Unit :-

Variable Cost Per Unit (At 59600 Sold Unit) :-

2) Total Fixed Cost Per Unit (At 59600 Sold Unit):-

Total Cost Per Unit :-

= Variable Cost per unit + Fixed Cost Per Unit

= $84 + $40

= $124

Particulars Per Unit Cost Direct Materials $17 Direct Labor $44 Variable Manuf. Overhead $15 Variable Selling and Admin. Expenses $8 Total Variable Cost Per Unit $84

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