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In: Accounting

Wamser Corporation needs to set a target price for its newly designed product, E2-D2. The following...

Wamser Corporation needs to set a target price for its newly designed product, E2-D2. The following data relate to it:

Direct materials

per unit

$15

total costs

Direct labour

 25

Variable manufacturing overhead

 14

Fixed manufacturing overhead

$4,000,000

Variable selling and administrative expenses

 12

Fixed selling and administrative expenses

 2,000,000

These costs are based on a budgeted volume of 1 million units produced and sold each year. Wamser uses cost-plus pricing to set its target selling price. The markup on the total unit cost is 25%. Instructions

a. Calculate the total variable cost per unit, total fixed cost per unit, and total cost per unit for E2-D2. Variable cost per unit = $66

b. Calculate the desired ROI per unit for E2-D2.

c. Calculate the target selling price for E2-D2. d. Calculate the variable cost per unit, fixed cost per unit, and total cost per unit, assuming that 800,000 E2-D2s are produced during the year. (Round to two decimal places.)

Please provide clear detailed steps. Will like if correct!

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PLEASE - - - - PLEASE KINDLY UP-VOTE. IT HELPS ME A LOT. THANK YOU IN ADVANCE.

ekkarill92 answered 2 years ago
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