Dexter Incorporated, Which Manufactures Various Lines of Computer Equipment, Is

question 2

Multiple Choice

Dexter Incorporated, which manufactures various lines of computer equipment, is planning to introduce a new line of laptops. Current plans call for the production and sale of 1,000 units, with estimated costs as follows: $\begin{array} { | c | r | r | } \hline \text { Variable costs: } & & \\\hline \text { Manufacturing } & \$ 450,000 & \\\hline \text { Selling and administrative } & 100,000 & \\\hline \text { Total variable costs } & & \$ 550,000 \\\hline \text { Fixed costs: } & & \\\hline \text { Manufacturing } & \$ 300,000 & \\\hline \text { Selling and administrative } & 180,000 & \\\hline \text { Total fixed costs } & & 480,000 \\\hline \text { Total costs } & & \$ 1.030,000 \\\hline\end{array}$ The average amount of capital invested in the laptop product line is $900,000 and Dexter's target return on investment is 18%. What price must Dexter charge if the company uses cost-plus pricing based on total cost?

• A)$868.
• B)$900.
• C)$1,000.
• D)$1,192.
• E)$1,215.40.

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Definitions:

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The ease with which your audience can understand and interpret the messages conveyed by your business communications.

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