Total

Direct materials

Direct labor

Variable manufacturing overhead

Fixed manufacturing overhead

Variable selling and administrative expenses

Fixed selling and administrative expenses

Cheyenne Windows Inc. is in the process of setting a target price on its newly designed tinted window. Cost data relating to the window at a budgeted volume of 4,000 units are as follows.

Per Unit

$ 102

$

$

67

16

$ 140,000

$

15

$

156,000

Cheyenne Windows uses cost-plus pricing methods that are designed to provide the company with a 30% ROI on its tinted window line. A total of $1,040,000 in assets is committed to production of the new tinted window.

(a

Your answer is incorrect.

Compute the markup percentage under absorption-cost pricing that will allow Cheyenne Windows to realize its desired ROI.

Markup Percentage

99.25

%