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Super Co. uses absorption cost-plus pricing to set selling price on a new product. Super will invest $400,000 in operating assets to produce and sell
Super Co. uses absorption cost-plus pricing to set selling price on a new product. Super will invest $400,000 in operating assets to produce and sell 20.000 units. Company's required return on investment (ROI) in its operating assets is 10%. The company has provided cost estimates for the new product as shown below: Per Unit Total Direct materials $6.00 Direct labor $4.00 $2.00 Variable manufacturing overhead Fixed manufacturing overhead $50,000 $1.00 Variable selling and admin. Expenses $30,000 Fixed selling and admin. expenses What is the selling price per unit? $17.00 $21.00 $18.00 $19.00
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