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Conditional Forma

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A

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B

$2$

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

C

$1$

$345$

$5$

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Rita Corporation produces commercial fertilizer spreaders. The following information is available for Rita's anticipated annual volume of $500,000$ units:

Direct materials

Direct labour

Variable manufacturing overhead

Fixed manufacturing overhead

Variable selling and administrative expenses Fixed selling and administrative expenses

Per Unit

$$37$

$43$

$65$

$53$

Total

$$15,000,000$

$11,400,000$

The company has a desired ROI of $25\%.$ It has invested assets of $$150,000,000.$

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$)$