Purchase Solution

Fixed overhead, ROI, markup percentages

Not what you're looking for?

Ask Custom Question

34. The following information is available for a product manufactured by Gardenia Corporation:
Per Unit Total
Direct materials $ 62.50
Direct labor $ 47.50
Variable manufacturing OH $ 15.00
Fixed manufacturing OH $ 250,000
Variable selling and admin expenses $ 10.00
Fixed selling and admin expenses $ 55,000

Gardenia has a desired ROI of 16%. It has invested assets of $8,250,000 and expects to produce 2,000 units per year.

Instructions
Compute each of the following:
1. Cost per unit of fixed manufacturing overhead and fixed selling and administrative expenses.
2. Desired ROI per unit.
3. Markup percentage using the absorption cost approach.
4. Markup percentage using the contribution approach.

Purchase this Solution

Solution Summary

Solution shows computations of cost per unit of fixed manufacturing overhead fixed selling and administrative expenses, ROI per unit and markup percentages

Solution Preview

Cost per unit of fixed manufacturing overhead = fixed manufacturing overhead /number of units= $250000/2000 =$125

Cost per unit of fixed selling and administrative expenses = fixed selling and administrative expenses /number of units = $55000/2000 = $27.5

Total fixed cost per unit = $125+$27.5 = $152.5

Total variable cost per unit =Direct material + direct labor + variable ...

Purchase this Solution


Free BrainMass Quizzes
Writing Business Plans

This quiz will test your understanding of how to write good business plans, the usual components of a good plan, purposes, terms, and writing style tips.

Operations Management

This quiz tests a student's knowledge about Operations Management

Learning Lean

This quiz will help you understand the basic concepts of Lean.

Change and Resistance within Organizations

This quiz intended to help students understand change and resistance in organizations

Academic Reading and Writing: Critical Thinking

Importance of Critical Thinking