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3. Diamond Visual Entertainment Inc. recently began production of a new product, flat panel displays, which required the investment of $1,500,000 in assets. The costs
3. Diamond Visual Entertainment Inc. recently began production of a new product, flat panel displays, which required the investment of $1,500,000 in assets. The costs of producing and selling 5,000 units of flat panel displays are estimated as follows: Diamond Visual Entertainment Inc. is currently considering establishing a selling price for flat panel displays. The president of Diamond Visual Entertainment has decided to use the cosi approach to product pricing and has indicated that the displays must earn a 17% return on invested assets. lem 3 Instructions a. Determine the amount of desired profit from the production and sale of flat panel displays. b. Assuming that the product cost method is used, determine: i. the cost amount per unit, ii. the markup percentage, and iii. the selling price of flat panel displays. c. Assuming that the total cost method is used, determine: i. the cost amount per unit, ii. the markup percentage (rounded to two decimal places), and iii. the selling price of flat panel displays. (Round markup to nearest whole dollar.) d. Assuming that the variable cost method is used, determine: i. the cost amount per unit, ii. the markup percentage (rounded to two decimal places), and iii. the selling price of flat panel displays. (Round markup to nearest whole dollar.) e. Comment on any additional considerations that could influence establishing the selling price for flat panel displays. 3. Diamond Visual Entertainment Inc. recently began production of a new product, flat panel displays, which required the investment of $1,500,000 in assets. The costs of producing and selling 5,000 units of flat panel displays are estimated as follows: Diamond Visual Entertainment Inc. is currently considering establishing a selling price for flat panel displays. The president of Diamond Visual Entertainment has decided to use the cosi approach to product pricing and has indicated that the displays must earn a 17% return on invested assets. lem 3 Instructions a. Determine the amount of desired profit from the production and sale of flat panel displays. b. Assuming that the product cost method is used, determine: i. the cost amount per unit, ii. the markup percentage, and iii. the selling price of flat panel displays. c. Assuming that the total cost method is used, determine: i. the cost amount per unit, ii. the markup percentage (rounded to two decimal places), and iii. the selling price of flat panel displays. (Round markup to nearest whole dollar.) d. Assuming that the variable cost method is used, determine: i. the cost amount per unit, ii. the markup percentage (rounded to two decimal places), and iii. the selling price of flat panel displays. (Round markup to nearest whole dollar.) e. Comment on any additional considerations that could influence establishing the selling price for flat panel displays
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