Learning Team Week 5

ACC 349

Problem P8-2A

Variable Cost per unit:

Direct materials 50

Direct labor 25

Variable manufacturing overhead 20

Variable selling and administrative expenses 18

Total Variable Cost 113

Fixed cost per unit:

Total Cost Budgeted Volume cost per unit

Fixed manufacturing overhead 600,000 50000 12

Fixed selling and administrative expenses 400,000 50000 8

Fixed cost per unit 1,000,000 20

Total unit cost 113 20 133

(a) Desired ROI per unit (1,200,000 x ) 50000 6

Markup percentage Desired ROI Total Unit Cost

6133

%

Target Selling Price Total Unit Cost Desired ROI per unit

133 6

139

(b) Variable cost per unit 113

Fixed cost per unit (1,000,000 40,000) 25

Total unit cost 138

Desired ROI...