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.
Definitions:
Indirect Method
A cash flow statement format that starts with net income and adjusts for non-cash transactions and changes in working capital to arrive at net cash provided by operating activities.
Comparative Balance Sheet
A financial statement that compares the balance sheets of two periods, highlighting changes in assets, liabilities, and equity.
Net Income
The total profit of a company after subtracting all its expenses from its revenues.
Direct Method
A way to prepare the cash flow statement where actual cash flow information from company’s operations segment is used.
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