Johnson Marine Has the Following Costs and Expected Sales for the Coming

question 73

Multiple Choice

Johnson Marine has the following costs and expected sales for the coming year. Johnson is considering a number of different methods to determine the price of its product. $\begin{array}{lr}&\text { Total Costs }\\\text { Variable Manufacturing } & \$ 2,350,000 \\\text { Variable Selling and Administrative } & 750,000 \\\text { Plant-level Fixed Overhead } & 1,200,000 \\\text { Fixed Selling and Administrative } & 600,000 \\\text { Batch-level Fixed Overhead } & 200,000 \\\text { Total Investment in Product Line } & 10,000,000 \\\text { Expected Sales (units) } & 20,000\end{array}$ If Johnson determines price using a desired return on life cycle costs of 30%, the price is:

• A) $262.50
• B) $306.00
• C) $375.00
• D) $364.29
• E) $330.00