Yo Inc. produces and sells yo-yos. It is currently planning to launch a new glow-in-the-dark...
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Accounting
Yo Inc. produces and sells yo-yos. It is currently planning to launch a new glow-in-the-dark model. The following are the projected costs based on projected units sold of 100,000.
Variable costs per unit:
Direct materials
$1.75
Direct labour
1.10
Variable manufacturing overhead
1.25
Variable selling and administrative expenses
2.10
Annual fixed costs and expenses:
Manufacturing overhead
$50,000
Selling and administrative expenses
40,000
Yo Inc. will invest $1,000,000 for this new launch and would like to earn a 28.40% return on its investment. The old model of yo-yo sells for $9.04.
Calculate
i) Total Cost Per Yoyo
ii)Desired ROI per yoyo
iii)Markup Percentage
iv)Target price Per yoyo
ii)
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