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Remaining Time: 44 minutes, 50 seconds. Question Completion Status: The management of Optica Corporation would like to set the selling price of a new product
Remaining Time: 44 minutes, 50 seconds. Question Completion Status: The management of Optica Corporation would like to set the selling price of a new product (P-80) using the absorption costing approach to cost-plus pricing. The company's accounting department has supplied the following estimates for the product P-80: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling and administrative expenses Fixed selling and administrative expenses Item D I Per Unit $34.0 $24.0 $14.0 Daragraph $8.4 Management plans to produce and sell 10,000 units of the product P-80 annually. The product P-80 would require an investment of $ 1600000 and has a required return on investment of 16%. Avial Required: (A) Determine the markup percentage on absorption cost for the product P-80. [2.5 points] (B) Determine the selling price for P-80 using the absorption costing approach. [1 point] (C) Assume that Optica Corporation is able to sell all units of P-80 that it can produce, calculate the net operating income or loss [1.5 points] For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). Per Year $140,000 10t $64,200
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