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Product Pricing using the Cost-Plus Approach Methods; Differential Analysis for Accepting Additional Business 20,000 units of flat panel displays are estimated as follows: product pricing
Product Pricing using the Cost-Plus Approach Methods; Differential Analysis for Accepting Additional Business 20,000 units of flat panel displays are estimated as follows: product pricing and has indicated that the displays must earn a 15% return on invested assets. Required: 1. Determine the amount of desired profit from the production and sale of flat panel displays. 2. Assuming that the product cost method is used, determine the following: 3. (Appendix) Assuming that the total cost method is used, determine the following: 4. (Appendix) Assuming that the variable cost method is used, determine the following: 6. Assume that as of October 31,16,000 units of flat panel displays have been produced and sold during the current yean. Analysis of the domestic market indicates that 2,500 additional units are expected to be sold during the remainder of the year at the normal product price determined under the product cost method. On November 5 , Digital Displays Inc, received an offer from Andes Visual Inc, for 1,000 units of flat panel displays at $225 each. Andes Visual Inc. Will market the units in Pery under its own brand name, and no variable selling and administrative expenses associated with the sale will be incurred by Digital Displays 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 factory, selling, and administrative capacity, a Prenate a differential analysis of the proposed sale to Andes Visual Inc. If an amount is zero, enter "0
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