Gibbs Corporation produces industrial robots for high-precision manufacturing. T

Question

Gibbs Corporation produces industrial robots for high-precision manufacturing. The following information is given for Gibbs Corporation.

Per Unit Total

Direct materials $420

Direct labor $320

Variable manufacturing overhead $ 73

Fixed manufacturing overhead $1,814,800

Variable selling and administrative expenses $ 60

Fixed selling and administrative expenses $ 561,890

The company has a desired ROI of 21%. It has invested assets of $61,424,000. It anticipates production of 3,490 units per year.

Compute the cost per unit of the fixed manufacturing overhead and the fixed selling and administrative expenses.

Fixed manfaucturing overhead $___________per unit

Fixed selling and administrative expenses $__________________per unit

Compute the desired ROI per unit.

ROI $_____________per unit

Explanation / Answer

Fixed Mfg Overhead 1814800 NO of Units 3490 Fixed Mfg Overhead per unit =1814800/3490 520 Fixed Selling & admin Exp per Unit =561890/3490 161 Total Invested Assets 61424000 Desired Return 21% Desired Return 12899040 No of Units 3490 3696 ROI per unit is 3696$

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