Crane Inc. produces and sells yo-yos. It is currently planning to launch a new glow-in-the-dark model. The following are the projected costs based on projected units sold of 100,000.

Variable costs per unit:
Direct materials		$1.40
Direct labour		1.10
Variable manufacturing overhead		1.45
Variable selling and administrative expenses		2.15

Annual fixed costs and expenses:
Manufacturing overhead		$50,000
Selling and administrative expenses		35,000

Crane Inc. will invest $1,000,000 for this new launch and would like to earn a 28% return on its investment. The old model of yo-yo sells for $8.83.

Calculate the total cost per yo-yo. (Round answer to 2 decimal places, e.g. 15.25.)

Total cost

$enter the total cost per yo-yo in dollars

per yo-yo

Determine the desired ROI per yo-yo. (Round answer to 2 decimal places, e.g. 15.25.)

Desired ROI

$enter the desired return on investment per yo-yo in dollars

per yo-yo

Calculate the markup percentage on the total cost per yo-yo. (Round answer to 2 decimal places, e.g. 15.25%.)

Markup percentage

enter the markup percentage on the total cost per yo-yo

%

Calculate the target price per yo-yo. (Round answer to 2 decimal places, e.g. 15.25.)

Target price

$enter the target price per yo-yo in dollars

per yo-yo

Answer rating: 100% (QA)

Solution 1 The Total Cost per yoyo Answer Total Cost 695 per yoyo Working Direct ma... View the full answer