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Markup percentage needed to provide the desired ROI Target selling price of the patio door $ EA %

Markup percentage needed to provide the desired ROI Target selling price of the patio door $ EA %

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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Wildhorse Doors, Inc. is in the process of setting a target selling price on its newly designed patio door. Cost data relating to the door at a budgeted volume of 5,000 units is as follows: Per Total Unit Direct materials $122 Direct labor 199 Variable manufacturing overhead 106 Fixed manufacturing overhead $915,000 Variable selling and administrative expenses 41 Fixed selling and administrative expenses 457,500 Wildhorse uses cost-plus pricing that provides it with a 25% ROI on its patio door line. A total of $4,880,000 in assets is committed to production of the new door. (a1) Compute each of the following under the absorption-cost approach: (Round answers to 0 decimal places, e.g. 5,275.) Markup percentage needed to provide the desired ROI % Target selling price of the patio door $
Transcribed Image Text:Wildhorse Doors, Inc. is in the process of setting a target selling price on its newly designed patio door. Cost data relating to the door at a budgeted volume of 5,000 units is as follows: Per Total Unit Direct materials $122 Direct labor 199 Variable manufacturing overhead 106 Fixed manufacturing overhead $915,000 Variable selling and administrative expenses 41 Fixed selling and administrative expenses 457,500 Wildhorse uses cost-plus pricing that provides it with a 25% ROI on its patio door line. A total of $4,880,000 in assets is committed to production of the new door. (a1) Compute each of the following under the absorption-cost approach: (Round answers to 0 decimal places, e.g. 5,275.) Markup percentage needed to provide the desired ROI % Target selling price of the patio door $
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