fpart A is already answered here , i need part B to be answered please PRINTER V
ID: 2412127 • Letter: F
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fpart A is already answered here , i need part B to be answered pleasePRINTER VERSION BACK NEXT Question 1 Lovell Computer Parts Inc. is in the process of setting a selling price on a new component it has just designed and developed. The following cost estimates for this new component have been provided by the accounting department for a budgeted volume of 55,000 units Per UnitTotal Direct materials Direct labor Variable manufacturing overhead 54 $ 22 s 23 550,000 Fixed manufacturing overhead Variable selling and administrative expenses 13 Fixed seWing and administrative expenses s 275,000 Lovell Computer Parts management requests that the total cost per unit be used in cost-plus pricing its products. On this particular product, management also directs that the target price be set to provide a 21 % return on investment (ROI) oinvested assets of S 1,115,400 Your answer is correct. computer Parts to earn its desired Ror of 21 % on this nene e com Compute the markup percentage and target selling price that wil allow u Round answers to 2 decimal places, e.g. 10.50.) 7 delete 0 tab return caps lock
Explanation / Answer
Req a: Total cost of 55000 units: Material (55000*54) 2970000 Labour (55000*22) 1210000 OH (55000*23) 1265000 Fixed maufacturing oH 550000 Variable Selling 715000 Fixed selling expense 275000 Total cost of 55000 units: 6985000 Markup 234234 (1115400*21%) % markup on Total cost 3.35% Total sales of 55000 units 7219234 Selling price (7219234/55000) 131.26 % Markup 3.35% Selling price 131.26 Req b: Total cost of 36300 units: Material (36300*54) 1960200 Labour (36300*22) 798600 OH (36300*23) 834900 Fixed maufacturing oH 550000 Variable Selling 471900 Fixed selling expense 275000 Total cost of 55000 units: 4890600 Markup 234234 (1115400*21%) % markup on Total cost 4.79% Total sales of 55000 units 5124834 Selling price (5124834/36300) 141.18 % Mmarkup 4.79% Selling price 141.18
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