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Ocean Co. has decided to produce a new product. The company has a total capital investment of $880,000. It is estimated that the target sales
Ocean Co. has decided to produce a new product. The company has a total capital investment of $880,000. It is estimated that the target sales volume for is 35,000 units per year. To pursue this product line, the company requires a 20% target return on investment. Variable production costs $3.00 per unit Variable marketing and distribution $2.00 per unit costs Fixed production costs $35,000 Fixed marketing and distribution $41,000 costs Compute the target operating income and use that information to answer the following question: what is the selling price the company must charge to earn the target operating income? None of these options is correct. $10.40 $12.20 $11.00
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