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Johnson Marine has the following costs and expected sales for the coming year. Johnson is considering a number of different methods to determine the price
Johnson Marine has the following costs and expected sales for the coming year. Johnson is considering a number of different methods to determine the price of its product.
| Total Costs | |||
| Variable Manufacturing | $ | 2,350,000 | |
| Variable Selling and Administrative | 750,000 | ||
| Plant-level Fixed Overhead | 1,200,000 | ||
| Fixed Selling and Administrative | 600,000 | ||
| Batch-level Fixed Overhead | 200,000 | ||
| Total Investment in Product Line | 10,000,000 | ||
| Expected Sales (units) | 20,000 | ||
If Johnson determines price using a 20% markup of life cycle cost, the price is:
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