Skyhigh Company is in the process of setting a selling price for its newest model stunt kite, the Looper. The controller of Skyhigh estimates variable cost per unit for the new model to be as follows:
In addition, Skyhigh anticipates incurring the following fixed cost per unit at a budgeted sales volume of 20,000 units:
Skyhigh uses cost-plus pricing and would like to earn a 10 percent return on its investment (ROI) of $400,000.
Instructions
Compute the selling price that would provide Skyhigh a 10 percent ROI.

Question

Skyhigh Company is in the process of setting a selling price for its newest model stunt kite, the Looper. The controller of Skyhigh estimates variable cost per unit for the new model to be as follows:  
In addition, Skyhigh anticipates incurring the following fixed cost per unit at a budgeted sales volume of 20,000 units:  
Skyhigh uses cost-plus pricing and would like to earn a 10 percent return on its investment (ROI) of $400,000.
Instructions
Compute the selling price that would provide Skyhigh a 10 percent ROI.

Quizplus · Accepted Answer

The Answer of Skyhigh Company is in the process of setting a selling price for its newest model stunt kite, the Looper. The controller of Skyhigh estimates variable cost per unit for the new model to be as follows:  
In addition, Skyhigh anticipates incurring the following fixed cost per unit at a budgeted sales volume of 20,000 units:  
Skyhigh uses cost-plus pricing and would like to earn a 10 percent return on its investment (ROI) of $400,000.
Instructions
Compute the selling price that would provide Skyhigh a 10 percent ROI.

Skyhigh Company Is in the Process of Setting a Selling