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 $28
Direct labor $37
Variable manufacturing overhead $10
Fixed manufacturing overhead $1,280,000
Variable selling and administrative expenses $ 7
Fixed selling and administrative expenses $800,000
These costs are based on a budgeted volume of 80,000 units produced and sold each year. National uses cost-plus pricing methods to set its target selling price. The markup percentage on total unit cost is 40%.
(a) Compute the total variable cost per unit, total fixed cost per unit, and total cost per unit for M14-M16.
Variable cost per unit
Fixed cost per unit
Total cost per unit
(b) Compute the desired ROI per unit for M14-M16. (Round answer to 2 decimal places, e. g. 10.50.)
Desired ROI |$ | per unit