Lovell Computer Parts Inc. is in the process of setting a selling price on a newcomponent it has just designed and developed. The following cost estimatesfor this new component have been provided by the accounting department fora budgeted volume of 50,000 units.Per Unit TotalDirect materials$50Direct labor26Variable manufacturing overhead20Fixed manufacturing overhead$600,000Variable selling and administrative expenses 19Fixed selling and administrative expenses400,000Lovell Computer Parts management requests that the total unit cost be used incost-plus pricing its products. On this particular product, management alsodirects that the target price be set to provide a 25% return on investment (ROI)on invested assets of $1,000,000.Instructions(Round all calculations to two decimal places.)Compute the markup percentage and target selling price that will allow LovellComputer Parts to earn its desired ROI of 25% on this new component.Assuming that the volume is 40,000 units, compute the markup percentage andtarget selling price that will allow Lovell Computer Parts to earn its desired ROI of25% on this new component.b. Target selling price $146.25

Name: Lovell Computer Parts Inc. is in the process of setting a selling pri
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Description: Lovell Computer Parts Inc. is in the process of setting a selling price on a newcomponent it has just designed and developed. The following cost estimatesfor this new component have been provided by the accounting department fora budgeted volume of

DM $ 50.00 DL $ 26.00 VOHs $ 20.00 Var S&M Exp $ 19.00 Variable…

Answered: ame of 50,000 units. Per Unit Total $50…

Business

Accounting

ame of 50,000 units. Per Unit Total $50 26 Facturing overhead 20 turing overhead $600,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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