Question
Longwood, Inc. manufactures various lines of computer equipment and is planning to introduce a new line of laptops. Current plans call for the production and
Longwood, Inc. manufactures various lines of computer equipment and is planning to introduce a new line of laptops. Current plans call for the production and sale of 500 units, with estimated costs as follows: Variable costs: Manufacturing $ 451,000 Selling and Administrative 101,000 Total variable costs $ 552,000 Fixed costs: Manufacturing $ 301,000 Selling and Administrative 181,000 Total fixed costs 482,000 Total costs $ 1,034,000 The average amount of capital invested in the laptop product line is $910,000 and Longwoods target return on investment is 20%. What price must Longwood charge if the company uses cost-plus pricing based on total cost?
Longwood, Inc. manufactures various lines of computer equipment and is planning to introduce a new line of laptops. Current plans call for the production and sale of 500 units, with estimated costs as follows: The average amount of capital invested in the laptop product line is $910,000 and Longwood's target return on investment is 20% What price must Longwood charge if the company uses cost-plus pricing based on total cost? $1,704. $1,820. $500. $2,432. None of the answers is correct
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