Question: Dewitt Corporation needs to set a target price for its

Dewitt Corporation needs to set a target price for its newly designed product M14–M16. The following data relate to this new product.


These costs are based on a budgeted volume of 80,000 units produced and sold each year. Dewitt uses cost-plus pricing methods to set its target selling price. The markup percentage on total unit cost is 30%.

Instructions
(a) Compute the total variable cost per unit, total fixed cost per unit, and total cost per unit for M14–M16.
(b) Compute the desired ROI per unit for M14–M16.
(c) Compute the target selling price for M14–M16.
(d) Compute variable cost per unit, fixed cost per unit, and total cost per unit assuming that 60,000 M14–M16s are sold during theyear.
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  • CreatedMarch 22, 2012
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