Cannon Corporation uses a cost-plus pricing model based on full cost. Below is cost information for the production and sale of 50,000 units of its sole product. Cannon desires a profit equal to a 20% return on invested assets of $700,000.
a. What is the total cost per unit per unit for the company's product?
b. What is the ROI or desired profit per unit for the company's product?
c. What is the markup percentage for this product? (round to 2 decimal places)
d. What is the expected selling price for the company's product?

Question

Cannon Corporation uses a cost-plus pricing model based on full cost. Below is cost information for the production and sale of 50,000 units of its sole product.  Cannon desires a profit equal to a 20% return on invested assets of $700,000. 
a. What is the total cost per unit per unit for the company's product?
b. What is the ROI or desired profit per unit for the company's product?
c. What is the markup percentage for this product? (round to 2 decimal places)
d. What is the expected selling price for the company's product?

Quizplus · Accepted Answer

The Answer of Cannon Corporation uses a cost-plus pricing model based on full cost. Below is cost information for the production and sale of 50,000 units of its sole product.  Cannon desires a profit equal to a 20% return on invested assets of $700,000. 
a. What is the total cost per unit per unit for the company's product?
b. What is the ROI or desired profit per unit for the company's product?
c. What is the markup percentage for this product? (round to 2 decimal places)
d. What is the expected selling price for the company's product?

Cannon Corporation Uses a Cost-Plus Pricing Model Based on Full