A Company Expects to Produce and Sell a Single Product

question 29

Essay

A company expects to produce and sell a single product. Management desires a 13% return on assets of $2,100,000. The following additional company information is available: $\begin{array}{lr}\text { Variable costs (per unit) } & \\\text { Production costs } & \$ 62 \\\text { Nonproduction costs } & \$ 8 \\\text { Fixed costs (in total) } & \\\text { Overhead } & \$ 521,280 \\\text { Nonproduction } & \$ 397,824\end{array}$
Required:
Compute selling price per unit given that markup percentage equals desired profit divided by total costs under the following independent assumptions.
(1) The company produced and sold 19,200 units
(2) The company produced and sold 114,888 units

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Definitions:

Parole Officer

A law enforcement agent who supervises offenders who have been released from prison on parole, ensuring they comply with parole conditions.

Wealth

An abundance of valuable material possessions or resources; the total of all assets owned by an individual or organization minus liabilities.

Saving

The act of preserving financial resources for future use, often through mechanisms like bank accounts, investments, or pension plans.

Compensating Differential

A difference in wages that arises to offset the desirability or undesirability of a job due to its characteristics.