Lanahan Corporation is in the process of setting a selling price for a new product it has just designed. The following data relates to this product for a budgeted volume of 10,000 units.
Expense Category Per Unit Total Amount
Direct Materials $30
Direct Labor $25
Variable Manufacturing Overhead $15
Fixed Manufacturing Overhead $200,000
Variable Selling & Admin Expenses $10
Fixed Selling & Admin Expenses $110,000
Lanahan uses cost-plus pricing to set its target selling price. The markup on total unit cost is 25%.
Calculate each of the following for the new product:
Total variable cost per unit:
Total fixed cost per unit:
Total cost per unit:
Desired ROI per unit:
Target selling price per unit: