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QUESTION 1 Skyhigh Company is in the process of setting a selling price for its newest model stunt kite, the Looper. The controller of Skyhigh
QUESTION 1 Skyhigh Company is in the process of setting a selling price for its newest model stunt kite, the Looper. The controller of Skyhigh estimates variable cost per unit for the new model to be as follows: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative expenses $15 8 4 5 $32 In addition, Skyhigh anticipates incurring the following fixed cost per unit at a budgeted sales volume of 20,000 units: Total Costs - Budget Volume = Cost per Unit Fixed manufacturing overhead $240,000 $12 Fixed selling and administrative expenses 260,000 20,000 13 Fixed cost per unit $25 20,000 Skyhigh uses cost-plus pricing and would like to earn a 10 percent return on its investment (ROI) of $400,000 Instructions Compute the selling price that would provide Skyhigh a 10 percent ROI
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