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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 544,000 units.

Per Unit Total
Direct materials $6.87
Direct labor $10.77
Variable manufacturing overhead $15.00
Fixed manufacturing overhead $3,318,400
Variable selling and administrative expenses $14.04
Fixed selling and administrative expenses $1,626,560

The company has a desired ROI of 23%. It has invested assets of $27,351,000.

Required:
a. Compute the total cost per unit
b. Desired ROI
c. Markup percentage using target cost

User Surender
by
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1 Answer

5 votes

Answer:

a)Total cost per unit =$41.729

b)ROI = $6,290,730.

c) Mark-up = 27.7%

Step-by-step explanation:

a)

The total cost per unit = variable cost + fixed cost per unit

Fixed cost unit = ($3,318,400 +$1,626,560)/544,000 units

= 9.089

Total cost per unit = 6.87+10.77+15 +9.089

=$41.729

b)

Desired ROI = 23%. × 27,351,000= $6,290,730.

c)

Mark-up

Mark-up is profit/target cost cost

Profit per unit = $6,290,730./544,000 units

= 11.56 =

Mark-up = (11.56/41.729) × 100 = 27.7%

User Cloudkollektiv
by
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