Slocum Company Has Determined the Following Information About a New

question 102

Multiple Choice

Slocum Company has determined the following information about a new product.The manufacturing process used for the product is very complex and it has a higher proportion of indirect costs than direct costs.The company wants a 100% markup on cost.The following data is available:
$\begin{array} { l } \text {Product cost according to traditional costing system }&\$ 4.00 \text { per unit}\\ \text {Product cost according to activity-based costing system }&\$ 7.00 \text { per unit}\\\end{array}$

What price per unit should Slocum Company use for this new product?

• A) $4.00
• B) $7.00
• C) $8.00
• D) $14.00

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Definitions:

Might-Equals-Right Principle

A belief that power or strength justifies moral superiority or entitlement to leadership and decision-making.

Self-Serving Decisions

Decisions made with the primary objective of benefiting oneself, often at the expense of others or ethical standards.

Proximity

The physical closeness or distance between people, objects, or locations, often influencing communication, interaction, or relationships.

Decision Maker

A person or group responsible for making choices or judgments that influence the outcome of a situation or organization.