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Problem 8-2A (Part Level Submission) Lovell Computer Parts inc. is in the process of setting...

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Accounting

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Problem 8-2A (Part Level Submission) 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 Per Unit $49 $24 $24 Total Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling and administrative expenses Fixed selling and administrative expenses $540,000 $15 360,000 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 22% return on investment (ROI) on invested assets of $1,186,900. (a) Your answer is correct. Compute the markup percentage and target selling price that will allow Lovell Computer Parts to earn its desired ROI of 22% on this new component (Round answers to 2 decimal places, e.g. 10.50.) Markup percentage Target selling price 137

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