Schopp Corporation makes a mechanical stuffed alligator that sings the Martian n

Question

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 529,000 units.

$1,497,070

The company has a desired ROI of 24%. It has invested assets of $27,414,000.

A) Compute the total cost per unit.

total cost per unit $_______________

B) Compute the desired ROI per unit.

desired ROI per unit $______________

C) Compute the markup percentage using total cost per unit.

Markup percentage using total cost per unit ______________%

D) Compute the target selling price

target selling price $_______________

Per Unit Total Direct materials $ 7.06 Direct labor $10.94 Variable manufacturing overhead $15.07 Fixed manufacturing overhead $3,443,790 Variable selling and administrative expenses $13.81 Fixed selling and administrative expenses

$1,497,070

Explanation / Answer

A) Total cost per unit = $7.06 + $10.94 + $15.07 + $13.81 + ($3443790 + 1497070)/ 529000

= $46.88 + $9.34 = $56.22

B) Desired ROI per unit = (24% * $27414000) / 529000 = $6579360/529000 = $12.44

C) Mark up % = Gross Profit / Total unit cost * 100 = 12.44 / 56.22 * 100 = 22.13%

D) Target Selling price = Total unit cost + gross profit per unit

= $56.22 + $12.44 = $68.66

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