Exercise 22-5 Schopp Corporation makes a mechanical stuffed alligator that sings
ID: 2400825 • Letter: E
Question
Exercise 22-5 Schopp Corporation makes a mechanical stuffed alligator that sings the Martian national anthem. The following information is available for Schopp Corporation's anticipated annual volume of 508,000 units. Per Unit Total Direct materials 7.01 10.95 14.83 Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling and administrative expenses Fixed selling and administrative expenses $3,561,080 14.02 $1,686,560 The company has a desired ROI of 25 %. It has invested assets of S 28,621,000 . Your answer is correct. Compute the total cost per unit. (Round answer to 2 decial places, e.g. 10.50.) Total cost per unit 57.14 LINK TO TEXT VIDEO: SIMILAR EXERCISEExplanation / Answer
b)Return on investment =invested asset *ROI
= 28621000*.25
= $ 7155250
Desired ROI per unit = 7155250/ 508000 = $ 14.09per unit
c)Markup % = Desired ROI per unit /total cost
= 14.09 /57.14
= .2466 or 24.66% on total cost
d)Target selling price= Target cost + desired ROI
= 57.14 + 14.09
= $ 71.23 Per unit
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