Question
Tropical Company sells 3,650 frying pans per year. The owner has invested $80,000 in the business and desires an 8% return on his investment (ROI=Net
Tropical Company sells 3,650 frying pans per year. The owner has invested $80,000 in the business and desires an 8% return on his investment (ROI=Net Income\Investments).
Product Costs
VC $4.5 per pan
FC $78,000 per year
Selling and Administrative Costs VC $3.00 per pan
FC $15,000 per year
If Tropical uses the absorption approach to its cost-based pricing, what is the mark-up percentage and the selling price?
Step by Step Solution
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There are 3 Steps involved in it
Step: 1
To calculate the desired net income we first need to calculate the total cost of th...
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Cost Management Measuring, Monitoring And Motivating Performance
Authors: Leslie G. Eldenburg, Susan K. Wolcott, Liang Hsuan Chen, Gail Cook
3rd Canadian Edition
978-1-119-1856, 978-1119185697
