Conquest,Inc Using the Cost-Plus Pricing Approach,what Should Be the Sales Price

question 148

Multiple Choice

Conquest,Inc.produces a special kind of light-weight,recreational vehicle that has a unique design.It allows the company to follow a cost-plus pricing strategy.It has $9,000,000 of average assets,and the desired profit is a 10% return on assets.Assume all products produced are sold.Additional data are as follows: $$\begin{array} { | l | l | l | } \hline \text { Sales volume } & 1000 & \text { units per year } \\\hline \text { Variable costs } & \$ 1000 & \text { per unit } \\\hline \text { Fixed costs } & \$ 3,500,000 & \text { per year } \\\hline\end{array}$$ Using the cost-plus pricing approach,what should be the sales price per unit?

• A) $5400
• B) $11,000
• C) $1100
• D) $1000

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