Question: Per unit Total Direct materials $ 62,00 Direct labor $ 48,00 Variable manufacturing overhead $ 15,00 Fixed manufacturing overhead $250.000,00 Variable selling and admin expenses

Per unit Total
Direct materials $ 62,00
Direct labor $ 48,00
Variable manufacturing overhead $ 15,00
Fixed manufacturing overhead $250.000,00
Variable selling and admin expenses $ 10,00
Fixed selling and admin expenses $ 55.000,00

XYZ company has a desired ROI of 16%. It has invested assets of $8,250,000 and expects to produce 2,500 units per year.

Instructions

Compute each of the following:

  1. Cost per unit of fixed manufacturing overhead and fixed selling and administrative expenses.
  2. Desired ROI per unit.
  3. Markup percentage using the absorption-cost approach.
  4. Markup percentage using the variable-cost approach.

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