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Dewitt Corporation needs to set a target price for its newly designed product M14â€“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 M14â€“M16.

(b) Compute the desired ROI per unit for M14â€“M16.

(c) Compute the target selling price for M14â€“M16.

(d) Compute variable cost per unit, fixed cost per unit, and total cost per unit assuming that 60,000 M14â€“M16s are sold during theyear.

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