Gibbs Corporation produces industrial robots for high-precision manufacturing. T
ID: 2555665 • Letter: G
Question
Gibbs Corporation produces industrial robots for high-precision manufacturing. The following information is given for Gibbs Corporation. Per Unit Total Direct materials $410 Direct labor $300 Variable manufacturing overhead $ 73 Fixed manufacturing overhead $1,986,000 Variable selling and administrative expenses $ 56 Fixed selling and administrative expenses $ 671,930 The company has a desired ROI of 19%. It has invested assets of $62,837,737. It anticipates production of 3,310 units per year. Compute the cost per unit of the fixed manufacturing overhead and the fixed selling and administrative expenses. Fixed manufacturing overhead $ per unit Fixed selling and administrative expenses $ per unit LINK TO TEXT Compute the desired ROI per unit. (Round answer to 0 decimal places, e.g. 125.) ROI $ per unit LINK TO TEXT Compute the target selling price. (Round answer to 0 decimal places, e.g. 125.) Target selling price $
Explanation / Answer
1
Calculation of total cost per unit
Particulars
Amount per unit
Direct materials
$410
Direct labour
$300
Variable manufacturing overheads
$73
2
Fixed manf overheads
(1,986,000/3,310)
$600
Variable selling and admin exp
$56
3
Fixed selling and admin exp
(671,930/3,310)
$203
Total cost per unit
$1,642
4
Desired Return per unit
Assets
$62,837,737
ROI
19%
Desired return total
$11,939,170
Per unit desired return (11,939,170/3,310)
$3,607
5
Target Selling price per unit
Total cost per unit
$1,642
Desired return per unit
$3,607
Selling price per unit
$5,249
1
Calculation of total cost per unit
Particulars
Amount per unit
Direct materials
$410
Direct labour
$300
Variable manufacturing overheads
$73
2
Fixed manf overheads
(1,986,000/3,310)
$600
Variable selling and admin exp
$56
3
Fixed selling and admin exp
(671,930/3,310)
$203
Total cost per unit
$1,642
4
Desired Return per unit
Assets
$62,837,737
ROI
19%
Desired return total
$11,939,170
Per unit desired return (11,939,170/3,310)
$3,607
5
Target Selling price per unit
Total cost per unit
$1,642
Desired return per unit
$3,607
Selling price per unit
$5,249
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