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Pargo ROI

Price: $1.99


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

Per UnitTotal
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.

(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 markup percentage and target selling price using absorption-cost pricing.
(Round the markup percentage to three decimal places.)
(d) Compute the markup percentage and target selling price using variable-cost pricing.

(Round the markup percentage to three decimal places.)

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