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4. Summertime Shades is considering the introduction of a new product. The company uses the absorption costing approach to cost-plus pricing. The company has gathered
4. Summertime Shades is considering the introduction of a new product. The company uses the absorption costing approach to cost-plus pricing. The company has gathered the following information: Variable Cost per unit Annual Fixed Cost Product Cost (DM, DL and OH) $7 $75,000 Selling and Administrative cost $0.8 $30,000 The new product has an investment of $200,000 and a required rate of return of 20%. Management plans to produce and sell 25,000 units of the new product annually. What is the mark up percentage needed to achieve the required return? Assume that Sunshine Corp. wishes to generate 12% return on investment for all of its products. Sunshine's marketing team believes that the company can sell 6,000 swimsuits at an average selling price of $50 per suit. The design and manufacturing teams estimate that the swimsuits will require an investment of $500,000. What is the target cost per swimsuit needed to achieve the desired profit
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