ACC 349 Week 5 Team Assignment Problems Ch. 8 11

Apr 19th, 2015
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ACC 349 Week 5 Team Assignment Problems Ch. 8 11

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Team CWeek 5 LT Assignment Textbook ExercisesACC/349P8-2A Bolus Computer Parts Inc. is in the process of setting a selling price on a new component it has just designed and developed. The following cost estimates for this new component have been provided by the accounting department for a budgeted volume of 50,000 units.Per Unit TotalDirect materials $50Direct labor $25Variable manufacturing overhead $20Fixed manufacturing overhead $600,000Variable selling and administrative expenses $18Fixed selling and administrative expenses $400,000Bolus Computer Parts management requests that the total cost per unit be used in costplus pricing its products. On this particular product, management also directs that the target price be set to provide a 25% return on investment (ROI) on invested assets of $1,200,000.Instructions(Round all calculations to two decimal places)(a) Compute the mark-up percentage and target selling price that will allow Bolus Computer Parts to earn its desired ROI of 25% on this new component. Answer to P8-2A (a) Variables Cost per unit Per UnitDirect materials$50Direct labor25Variable manufacturing overhead20Variable selling and administrative expenses18Variable cost per unit$113 Fixed cost per unit (50,000 units) Total Costs/Budgeted Volume=Cost Per UnitFixed manufacturing overhead$600,00050,000$12F

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