Lovell Computer Parts Inc. is in the process of setting a selling price on a...
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Accounting
Lovell 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 45,000 units Total Unit $ 45 s 20 $ 15 Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling and administrative expenses Fixed selling and administrative expenses 450,000 13 s 225,000 Lovell Computer Parts management requests that the total cost per unit be used in cost-plus pricing its products. On this particular product management also directs that the target price be set to provide a 20 % return on investment (ROI) on invested assets of $1,100,000 Compute the markup percentage and target selling price that will allow Lovell Computer Parts to earn its desired ROI of 20 % on this new component Markup percentage Target selling price s Round answers to 2 decimal places, eg 10.50 )
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