Magpie Corporation Uses the Total Cost Concept of Product Pricing

question 110

Multiple Choice

Magpie Corporation uses the total cost concept of product pricing. Below is cost information for the production and sale of 60,000 units of its sole product. Magpie desires a profit equal to a 25% rate of return on invested assets of $700,000. The unit selling price for the company's product is:

• A) $15.00
• B) $13.82
• C) $15.80
• D) $14.76

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Definitions:

Cost Of Production Report

A document detailing the total cost involved in producing goods or completing a production cycle.

Equivalent Units

A concept used in cost accounting to convert partially completed goods into a number of complete units of output, allowing for a consistent measure of output.

Conversion Cost

Comprises expenses related to transforming inputs into finished outputs, specifically through labor and overhead costs, essential in manufacturing processes.