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

question 24

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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: 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. 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.


Definitions:

Dividend

A disbursement by a company to its stockholders, typically from earnings.

Growth Rate

The growth rate refers to the percentage increase in the value, size, or number of something over a specific period.

Price-Earnings Ratio

A valuation metric for companies, calculated by dividing the current market price of a stock by its earnings per share.

Dividend Payout Ratio

The dividend payout ratio is the proportion of earnings paid to shareholders in the form of dividends, expressed as a percentage of the company's total earnings.

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