Goliath Corporation is in the process of setting a selling price for a new produ

Question

Goliath Corporation is in the process of setting a selling price for a new product it has just designed. The following data relate to this product for a budgeted volume of 60,000 units. Per Unit Total Direct materials $30 Direct labor 40 Variable manufacturing overhead 10 Fixed manufacturing overhead $1,800,000 Variable selling and administrative expenses 6 Fixed selling and administrative expenses 1,440,000 Goliath uses cost-plus pricing to set its target selling price. The markup on total unit cost is 30%. Compute total variable cost per unit, total fixed cost per unit, and total cost per unit for the new product Total variable cost per unit $ Total fixed cost per unit $ Total cost per unit $ Compute desired ROI per unit for the new product. Desired ROI per unit $ Compute target selling price for the new product. Target selling price $

Explanation / Answer

varaible Cost per unit Direct material Cost 30 Direct labor Cost 40 Variable Manufacturing Overhead 10 Variable Selling and Administrative Expe 6 Variable Cost per unit 86 Fixed Cost per unit Fixed manufacturing Overhead                   1,800,000 Fixed Selling and Administrative Expe                   1,440,000 Total Fixed Cost                   3,240,000 Budgeted Volume in Units                        60,000 Fixed Cost per unit                               54 Total Cost Per Unit (86+54) 140 Target selling Price Total Cost 140 mark up (30%) 42 Target selling Price 182

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