Answer and Explanation

Weather Guard Windows Inc. is setting a target price on its newly designed tinted window. Cost data for the window at a budgeted volume of 4,200 units are as follows: Total Per Unit $100 70 Direct materials Direct labour Variable manufacturing overhead Fixed manufacturing overhead Variable selling and administrative expenses Fixed selling and administrative expenses $134,400 12 105,840 Weather Guard Windows uses cost-plus pricing to provide the company with a 35% ROI on its tinted window line. It has committed a total of $1,058,400 in assets to the production of the new tinted window. Calculate the markup percentage under the absorption-cost approach that will allow Weather Guard Windows to realize its desired ROI. (Round intermediate calculations to 2 decimal places, e.g. 15.25 and final answer to o decimal places, e.g. 15%.) Markup percentage under the absorption-cost approach SHOW LIST OF ACCOUNTS Calculate the target price of the window under the absorption-cost approach, and show proof that the desired ROI is realized. (Round target price to 2 decimal places, e.g. 15.25.) Target Price WEATHER GUARD WINDOWS INC. Budgeted Absorption-Cost Income Statement (Tinted window) Desired ROI = % x $ SHOW LIST OF ACCOUNTS Calculate the markup percentage under the variable-cost approach that will allow Weather Guard Windows to realize its desired ROI. (Round answer to 2 decimal places, e.g. 15.25%.) Markup percentage under the variable-cost approach SHOW LIST OF ACCOUNTS Calculate the target price of the window under the variable-cost approach, and show proof that the desired ROI is realized. (Round target price to 2 decimal places, e.g. 15.25.) Target Price WEATHER GUARD WINDOWS INC. Budgeted Variable-Cost Income Statement (Tinted window) Desired ROI = $