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compute the markup percentage to achieve a desired roi of 20 per unit 638001

Cleanmore Products, Inc. is in the process of setting a selling price on its new top of the line, 3 horsepower, 16 gallon, variable speed wet/dry shop vacuum. The per unit variable cost estimates for the new shop vacuum are as follows.


Per Unit

Direct Materials


Direct Labor


Variable manufacturing overhead


Fixed manufacturing overhead


In addition, Cleanmore has the following fixed costs per unit at a budgeted sales volume of 10,000 units.

Cleanmore has decided to price its new shop vacuum to earn a 20% return on its investment (ROI) of $1,000,000.
Compute the markup percentage to achieve a desired ROI of $20 per unit:

Compute the target selling price: 

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