Gainer Corporation makes a mechanical stuffed alligator that sings the Mexican national anthem. The following information is available for Gainer Corporation's anticipated annual volume of 500,000 units.
Per Unit Total
Direct materials $ 8
Direct labor $ 9
Variable manufacturing overhead $15
Fixed manufacturing overhead $3,500,000
Variable selling and administrative expenses $14
Fixed selling and administrative expenses $1,500,000
The company has a desired ROI of 25%. It has invested assets of $24,080,000.
Instructions
(a) Compute the total cost per unit.
(b) Compute the desired ROI per unit.
(c) Compute the markup percentage using total cost per unit.
(d) Compute the target selling price