National Corporation needs to set a target price for its newly designed product M14-M16. The following data relate to this new product.
Per Unit Total
Direct materials $23
Direct labor $45
Variable manufacturing overhead $12
Fixed manufacturing overhead $1,296,000
Variable selling and administrative expenses $ 10
Fixed selling and administrative expenses $ 1,134,000
These costs are based on a budgeted volume of 80,000 units produced and sold each year. National uses cost-plus pricing methods to set its target selling price. The markup percentage on total unit cost is 35%.
Required:
a) Compute the total variable cost per unit, total fixed cost per unit, and total cost per unit for M14-M16.
b) Compute the desired ROI per unit for M14-M16. (Round answer to 2 decimal places, e. g. 10.50.)
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