Question
Assume that a company uses the absorption costing approach to cost-plus pricing. It is considering the introduction of a new product. To determine a selling
Assume that a company uses the absorption costing approach to cost-plus pricing. It is considering the introduction of a new product. To determine a selling price, the company has gathered the following information:
| Number of units to be produced and sold each year | 15,000 |
|---|---|
| Unit product cost | $ 38.00 |
| Estimated annual selling and administrative expenses | $ 63,900 |
| Estimated investment required by the company | $ 780,000 |
| Desired return on investment (ROI) | 12% |
The selling price that the company would establish using a markup percentage on absorption cost is closest to:
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Managerial Accounting
Authors: Ray Garrison, Eric Noreen, Peter Brewer
16th edition
1259307417, 978-1260153132, 1260153134, 978-1259307416
