Per unit Total
Direct materials $ 62,00 Direct labor $ 48,00 Variable manufacturing overhead $ 15,00 Fixed manufacturing overhead $250.000,00
Variable selling and admin expenses $ 10,00 Fixed selling and admin expenses $ 55.000,00
XYZ company has a desired ROI of 16%. It has invested assets of $8,250,000 and expects to produce 2,500 units per year.
Instructions
Compute each of the following:
1. Cost per unit of fixed manufacturing overhead and fixed selling and administrative expenses.
2. Desired ROI per unit.
3. Markup percentage using the absorption-cost approach.
4. Markup percentage using the variable-cost approach.