Excel Manufacturing Is Planning to Make and Sell 5,000 Units

question 38

Essay

Excel Manufacturing is planning to make and sell 5,000 units of its only product, Excel-A. Excel is considering a variety of methods to determine the price of the order. Some key information about Excel follows: Required:
1. Determine the price using the markup of 40% of full manufacturing costs.
2. Determine the price using a 20% markup on life cycle costs.
3. Determine the price assuming a desired 50% gross margin percentage.
4. Determine the price assuming a desired 30% return on life cycle costs.
5. Determine the price assuming a desired 20% return on investment.

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Definitions:

Straight Bankruptcy

Another term for Chapter 7 bankruptcy, where the debtor's non-exempt assets are sold to pay off unsecured debts.

Petition

A formal written request to a court requesting a specific legal action.

Complex Carbohydrates

Carbohydrates composed of sugar molecules linked together in long, complex chains, also known as polysaccharides.

Cellulose

A complex carbohydrate found in the cell walls of plants, serving as a structural component.