ACC 349 Week 5 Team Assignment Problems Ch. 8 & 11

P8-2ABolus 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                                                           $50

Direct labor                                                                 $25

Variable manufacturing overhead                               $20

Fixed manufacturing overhead                                                                       $600,000

Variable selling and administrative expenses             $18

Fixed selling and administrative expenses                                                      $400,000


Bolus Computer Parts management requests that the total cost per unit be used in costplus pricing its products. On this particular product, management also directs that the target price be set to provide a 25% return on investment (ROI) on invested assets of $1,200,000.


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