Willis Products Inc. uses the total cost concept of applying the cost-plus approach to product pricing. The costs of producing and selling 200,000 units of medical tablets are as follows:
Variables costs per unit: _______________________ Fixed costs:
Direct materials ......................... $ 75 .......... Factory overhead .............. $800,000
Direct labor .............................. 115 .......... Selling and admin. Exp. ....... 1,200,000
Factory overhead ......................... 30
Selling and admin. Exp. .................. 20
Total ..................................... $240
Willis Products desires a profit equal to a 20% rate of return on invested assets of $12,000,000.
a. Determine the amount of desired profit from the production and sale of 200,000 units.
b. Determine the total costs and the cost amount per unit for the production and sale of 200,000 units.
c. Determine the total cost markup percentage per unit.
d. Determine the selling price per unit?