Yo Inc. produces and sells yo-yos. It is currently planning to launch a new glow-in-the-dark...
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Accounting
Yo Inc. produces and sells yo-yos. It is currently planning to launch a new glow-in-the-dark model. The following are the projected costs based on projected units sold of 100,000.
| Variable costs per unit: | ||
| Direct materials | $1.75 | |
| Direct labour | 1.10 | |
| Variable manufacturing overhead | 1.25 | |
| Variable selling and administrative expenses | 2.10 |
| Annual fixed costs and expenses: | ||
| Manufacturing overhead | $50,000 | |
| Selling and administrative expenses | 40,000 |
Yo Inc. will invest $1,000,000 for this new launch and would like to earn a 28.40% return on its investment. The old model of yo-yo sells for $9.04.
Calculate
i) Total Cost Per Yoyo
ii)Desired ROI per yoyo
iii)Markup Percentage
iv)Target price Per yoyo
ii)
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