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Compute the markup percentage under variable costing that will allow Sheffield Products its desired ROI. (Round answer to 2 decimal places, eg. 10.50%) Markup Percentage

Compute the markup percentage under variable costing that will allow Sheffield Products its desired ROI. (Round answer to 2 decimal places, eg. 10.50%) Markup Percentage

FINANCIAL ACCOUNTING
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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Sheffield Products desires to set a target price for its newest product. Information for a budgeted volume of 8,000 units is shown below. Per Unit Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling and administrative expenses $ 29 Fixed selling and administrative expenses $ 130 $ 80 $ 55 Total $ 50,000 $ 70,000 Sheffield Products uses cost-plus pricing and management wants a 25% ROI on the new product. Assets of $1,400,000 are committed to production of the new product.
Transcribed Image Text:Sheffield Products desires to set a target price for its newest product. Information for a budgeted volume of 8,000 units is shown below. Per Unit Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling and administrative expenses $ 29 Fixed selling and administrative expenses $ 130 $ 80 $ 55 Total $ 50,000 $ 70,000 Sheffield Products uses cost-plus pricing and management wants a 25% ROI on the new product. Assets of $1,400,000 are committed to production of the new product.
Sheffield Products desires to set a target price for its newest product. Information for a budgeted volume of 8,000 units is shown below. Per Unit Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling and administrative expenses $ 29 Fixed selling and administrative expenses $ 130 $ 80 $ 55 Total $ 50,000 $ 70,000 Sheffield Products uses cost-plus pricing and management wants a 25% ROI on the new product. Assets of $1,400,000 are committed to production of the new product.
Transcribed Image Text:Sheffield Products desires to set a target price for its newest product. Information for a budgeted volume of 8,000 units is shown below. Per Unit Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling and administrative expenses $ 29 Fixed selling and administrative expenses $ 130 $ 80 $ 55 Total $ 50,000 $ 70,000 Sheffield Products uses cost-plus pricing and management wants a 25% ROI on the new product. Assets of $1,400,000 are committed to production of the new product.
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