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Ritter Company: An Example Let's assume that Ritter Company wants to set the selling price on a product that has just undergone some design modifications.
Ritter Company: An Example Let's assume that Ritter Company wants to set the selling price on a product that has just undergone some design modifications. The company has invested $100,000 in operating assets to sell an estimated sales volume of 10,000 units. Its required return on investment (ROI) in its operating assets is 20%. The accounting department has provided the follow- ing cost estimates for the redesigned product: Per Unit Total . Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling and administrative expenses Fixed selling and administrative expenses $6 $4 $3 $70,000 $2 $60,000
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