Product Pricing using the Cost-Plus Approach Methods; Differential Analysis for Accepting Additional Business Crystal Displays Inc. recently began production of a new product, flat panel displays, which required the investment of $1,500,000 in assets. The costs of producing and selling 5,000 units of flat panel displays are estimated as follows: Variable costs per unit: Fixed costs: Direct materials $120 Factory overhead Selling and administrative expenses $250,000 Direct labor 30 150,000 Factory overhead 50 Selling and administrative expenses 35 Total variable cost per unit $235 Crystal Displays Inc. is currently considering establishing a selling price for flat panel displays. The president of Crystal Displays has decided to use the cost-plus approach to product pricing and has indicated that the displays must eam a 15% return on invested assets. Required: Note: Round all markup percentages to two decimal places, if required. Round all costs per unit and selling prices per unit to the nearest whole dollar. 1. Determine the amount of desired profit from the production and sale of flat panel displays. 200 X 2. Assuming that the product cost method is used, determine the following: a. Product cost amount per b. Markup percentage % C Selling price per unit s Check My Work Previous Next b. Markup percentage % C. Selling price per unit $ 3. (Appendix) Assuming that the total cost method is used, determine the following: a. Total cost amount per unit $ b. Markup percentage % C. Selling price per unit $ 4. (Appendix) Assuming that the variable cost method is used, determine the following: a. Variable cost amount per unit $ b. Markup percentage % C. Selling price per unit A $ 5. The cost-plus approach price computed above should be viewed as a general guideline for establishing long-run normal prices; however, other considerations, such as the price of competing products and general economic conditions of the marketplace could lead management to establish a different short-run price