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C$17$

Unit Cost

A

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Question $1.$ Pricing $-$ Version A $(14$ marks$)$

Rita Corporation produces commercial fertilizer spreaders. The following information is available for Rita's anticipated annual volume of $600,000$ units:

Total

Direct materials

Direct labour

Variable manufacturing overhead

Fixed manufacturing overhead

Variable selling and administrative expenses

$11,400,000$

Fixed selling and administrative expenses

The company has a desired ROI of $20\%.$ It has invested assets of $$220,000,000.$

Required:

a$)$ Assume that Rita Corp. uses total cost$-$plus pricing. Calculate the markup percentage and determine the target selling price. Round to $2$ decimal places. $(7$ marks$)q,$ Total

Sheet$1$

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C$22$

The company has a desired ROI of $20\%.$ It has invested assets of $$220,000,000.$

$13$

Required:

a$)$

Assume that Rita Corp. uses total cost$-$plus pricing. Calculate the markup percentage and determine the target selling price. Round to $2$ decimal places. $(7$ marks$)$

Unit Cost

Total

b$)$ Assume that Rita Corp. uses absorption $-$cost pricing. Calculate the markup percentage and determine the target selling price. Round to $2$ decimal places. $(7$ marks$)$

Sheet$1$

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C$24$

A

B

B

C

D

E

F

b$)$

Assume that Rita Corp. uses absorption $-$cost pricing. Calculate the markup percentage and determine the target selling price.

Round to $2$ decimal places. $(7$ marks$)$

$47$ End of Question.

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