Question
Stevenson Corporation produces and sells yachts for wealthy customers. Stevensons accountants produced the data shown below as a basis for client negotiations for the coming
Stevenson Corporation produces and sells yachts for wealthy customers. Stevensons accountants produced the data shown below as a basis for client negotiations for the coming year:
| Big Shot | Super Star | CEO |
Basic yacht | $ 600 | $ 600 | $ 600 |
Customization costs | 300 | 500 | 200 |
Marketing costs | 100 | 400 | 300 |
Total costs | $1,000 | $1,500 | $1,100 |
Assume that all the preceding costs are avoidable. The company will incur an additional $800 in unavoidable costs during the coming year. Stevensons managers want to achieve a profit margin of 80% based on total costs. Suppose Stevenson allocates unavoidable corporate costs based on total avoidable costs. The selling price of Super Stars yacht will be:
Group of answer choices
$2,200
$3,300
$1,833
$1,467
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