Bridgeport Windows Inc is in the process of setting a target price on its newly designed tinted
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Question:
Bridgeport Windows Inc is in the process of setting a target price on its newly designed tinted window. Cost data relating to the window at a budgeted volume of 3,440 units are as follows.
Per Unit | Total | |
Direct materials | $110 | |
Direct labor | $ 70 | |
Variable manufacturing overhead | $10 | |
Fixed manufacturing overhead | $103,200 | |
Variable selling and administrative expenses | $10 | |
Fixed selling and administrative expenses | $87,720 |
Bridgeport Windows uses cost-pus pricing methods that are designed to provide the company with a 25% ROI in its window line. A total of 873,760 in assets is committed to production of the new tinted window.
Compute the markup percentage under variable-cost pricing that will allow Bridgeport Windows to realize its desired ROI.
Related Book For
Managerial Accounting Tools for business decision making
ISBN: 978-0470477144
5th edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
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