Foduct pricing using the cost-plus approach concepts difta PR 24-SA Product pricing using accepting additional business Display Labs Inc. recently be required the investment of $1,80% units of flat panel displays an Cabs Inc. recently bean production of a new product, flat par is of producing and Variable costs per unit: Direct materials Direct labor Factory overhead Selling and administrative expenses 5 90 Fixed costs: Factory overhead Selling and administrative ex 20 40 Total $185 Display Labs Inc. is currently considering establishing a selling price ys. The president of Display Labs has decided to use the cost product pricing and has indicated that the displays must earn a 20% rate of invested assets. price for at the cost-plus approach 20% rate of Comment on any additional considerations that could influence este the selling price for flat panel displays. 6. Assume that as of August 1. 2012. 5.000 units of flat panel displays have been P duced and sold during the current vear. Analysis of the domestic market indicates that 4,000 additional units are expected to be sold during the remainder of the year at the normal product price determined under the product cost concept. On August 3, Dis- play Labs Inc. received an offer from Video Systems Inc. for 1,500 units of flat panel displays at $225 each. Video Systems Inc. will market the units in Canada under its own brand name, and no selling and administrative expenses associated with the sale will be incurred by Display Labs Inc. The additional business is not expected to affect the domestic sales of flat panel displays, and the additional units could be produced using existing capacity. a. Prepare a differential analysis of the proposed sale to Video Systems Inc. b. Based on the differential analysis in part (a), should the proposal be accepted