Skyhigh Company is in the process of setting a selling price for its newest model stunt...

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Skyhigh Company is in the process of setting a selling price for its newest model stunt kite, the Looper. The controller of Skyhigh estimates variable cost per unit for the new model to be as follows: $15 8 Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative expenses 4 $32 In addition, Skyhigh anticipates incurring the following fixed cost per unit at a budgeted sales volume of 20,000 units: Total Costs Budget Volume = Cost per Unit Fixed manufacturing overhead Fixed selling and administrative expenses Fixed cost per unit $240,000 260,000 20,000 20,000 $12 13 $25 Skyhigh uses cost-plus pricing and would like to earn a 10 percent return on its investment (ROI) of $400,000. Instructions Compute the selling price that would provide Skyhigh a 10 percent ROI. Skyhigh Company is in the process of setting a selling price for its newest model stunt kite, the Looper. The controller of Skyhigh estimates variable cost per unit for the new model to be as follows: $15 8 Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative expenses 4 $32 In addition, Skyhigh anticipates incurring the following fixed cost per unit at a budgeted sales volume of 20,000 units: Total Costs Budget Volume = Cost per Unit Fixed manufacturing overhead Fixed selling and administrative expenses Fixed cost per unit $240,000 260,000 20,000 20,000 $12 13 $25 Skyhigh uses cost-plus pricing and would like to earn a 10 percent return on its investment (ROI) of $400,000. Instructions Compute the selling price that would provide Skyhigh a 10 percent ROI.

Answer rating: 100% (QA)

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