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Pargo Robots

Price: $1.99


Pargo Corporation produces industrial robots for high-precision manufacturing.
The following information is given for Pargo Corporation.

Per Unit Total
Direct materials (tapes, CDs, etc)  380
 Direct labor   290
Variable overhead  72
Fixed overhead  1,800,000
Variable selling and administrative expenses  55
Fixed selling and administrative expense  324,000

The company has a desired ROI of 20%. It has invested assets of $51,000,000. It anticipates
production of 3,000 units per year.

Instructions
(a) Compute the cost per unit of the fixed manufacturing overhead and the fixed selling
and administrative expenses.
(b) Compute the desired ROI per unit. (Round to the nearest dollar.)
(c) Compute the target selling price.

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