Exercise E8-5, Marlowe Corporation makes a mechanical stuffed alligator that sings the Martian national anthem. The following information
is available for Marlowe Corporation’s anticipated annual volume of500,000units.
Per UnitTotal
Direct materials$7
Direct labor$9
Variable manufacturing overhead$15
Fixed manufacturing overhead########
Variable selling and admin expenses$14
Fixed selling and admin expenses########
The company has a desired ROI of25%It has invested assets of########
Instructions:
(a) Compute the total cost per unit.
Total cost per unit:Per Unit
TitleAmount
TitleAmount
TitleAmount
TitleAmount
TitleAmount
TitleAmount
Total cost per unit:Formula
(b) Compute the desired ROI per unit.
Desired ROI per unit =TitleXTitle÷Title
Desired ROI per unit =PercentageXAmount÷Amount
Desired ROI per unit =Formula
(c) Compute the markup percentage using total cost per unit.
Markup percentage =Title
Title
Markup percentage =Amount
Amount
Markup percentage =Formuka
(d) Compute the target selling price.
Target selling price =Title+Title
Target selling price =Amount+Formula
Target selling price =Formula