Question
A magnet manufacturing company provides the following financial information about their latest product. The illustration is a two-column, seven row table with no headings or
A magnet manufacturing company provides the following financial information about their latest product.\ The illustration is a two-column, seven row table with no headings or totals. Reading across row by row, beginning with the first row, the table reads as: Number of units to be produced; 1,000,000. Second row reads as: Direct material; $600,000. Third row reads as: Direct labour; 220,000. The fourth row reads as: Variable manufacturing overhead; 400,000. Fifth row reads as: Fixed manufacturing overhead; 700,000. The sixth row reads as: Selling and administration; 560,000 and the seventh and final row reads as: Investment; 2,500,000.\ \ The required rate of return is 20%. If they use the absorption-cost pricing approach, what should be their price per unit?\ Select answer from the options below\ $3.15\ $3.86\ $2.30\ $2.98
A magnet manufacturing company provides the following financial information about their latest product.\ The illustration is a two-column, seven row table with no headings or totals. Reading across row by row, beginning with the first row, the table reads as: Number of units to be produced; 1,000,000. Second row reads as: Direct material; $600,000. Third row reads as: Direct labour; 220,000. The fourth row reads as: Variable manufacturing overhead; 400,000. Fifth row reads as: Fixed manufacturing overhead; 700,000. The sixth row reads as: Selling and administration; 560,000 and the seventh and final row reads as: Investment; 2,500,000.\ \ The required rate of return is 20%. If they use the absorption-cost pricing approach, what should be their price per unit?\ Select answer from the options below\ $3.15\ $3.86\ $2.30\ $2.98
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