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Question: Lovell Computer Parts Inc. is in the process of setting a selling price on a new component it has…
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Lovell Computer Parts Inc. is in the process of setting a
selling price on a new component it has just designed and
developed. The following cost estimates for this new component have
been provided by the accounting department for a budgeted volume of
50,000 units.

Per Unit Total
Direct materials $ 45
Direct labor $ 29
Variable manufacturing overhead $ 20
Fixed manufacturing overhead $ 750,000
Variable selling and administrative expenses $ 13
Fixed selling and administrative expenses $ 400,000

Lovell Computer Parts management requests that the total cost per
unit be used in cost-plus pricing its products. On this particular
product, management also directs that the target price be set to
provide a 26 % return on investment (ROI) on invested assets of $
1,236,600 .

Question: Lovell Computer Parts Inc. is in the process of setting aselling price on a new component it has...

Question: Lovell Computer Parts Inc. is in the process of setting aselling price on a new component it has...

Question: Lovell Computer Parts Inc. is in the process of setting aselling price on a new component it has...

Question: Lovell Computer Parts Inc. is in the process of setting aselling price on a new component it has...

(a)

Question: Lovell Computer Parts Inc. is in the process of setting aselling price on a new component it has...
Question: Lovell Computer Parts Inc. is in the process of setting aselling price on a new component it has... Your answer is correct.

Compute the markup percentage and target selling price that will
allow Lovell Computer Parts to earn its desired ROI of 26 % on this
new component. (Round answers to 2 decimal places, e.g.
10.50.)

Markup percentage

Question: Lovell Computer Parts Inc. is in the process of setting aselling price on a new component it has...

%
Target selling price $

Question: Lovell Computer Parts Inc. is in the process of setting aselling price on a new component it has...

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Question: Lovell Computer Parts Inc. is in the process of setting aselling price on a new component it has...

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Question: Lovell Computer Parts Inc. is in the process of setting aselling price on a new component it has...

Question: Lovell Computer Parts Inc. is in the process of setting aselling price on a new component it has...

Question: Lovell Computer Parts Inc. is in the process of setting aselling price on a new component it has...

Question: Lovell Computer Parts Inc. is in the process of setting aselling price on a new component it has...

(b)

Question: Lovell Computer Parts Inc. is in the process of setting aselling price on a new component it has...
Question: Lovell Computer Parts Inc. is in the process of setting aselling price on a new component it has... Your answer is incorrect. Try again.

Assuming that the volume is 38,800 units, compute the markup
percentage and target selling price that will allow Lovell Computer
Parts to earn its desired ROI of 26 % on this new component.
(Round answers to 2 decimal places, e.g.
10.50.)

Markup percentage

Question: Lovell Computer Parts Inc. is in the process of setting aselling price on a new component it has...

%
Target selling price $

Question: Lovell Computer Parts Inc. is in the process of setting aselling price on a new component it has...

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