Ritchie Corporation Manufactures a Product That Has the Following Costs

question 16

Essay

Ritchie Corporation manufactures a product that has the following costs: The company uses the absorption costing approach to cost-plus pricing as described in the text.The pricing calculations are based on budgeted production and sales of 37, 000 units per year.The company has invested $160, 000 in this product and expects a return on investment of 15%.
Required:
a.Compute the markup on absorption cost.
b.Compute the selling price of the product using the absorption costing approach.

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Definitions:

Material Culture

The physical objects, resources, and spaces that people use to define their culture, including buildings, tools, and artifacts.

Culture

The set of shared attitudes, values, goals, and practices that characterizes an institution, organization, or group.

Linguistic Relativity

The hypothesis that the structure of a language affects its speakers' world view or cognition, and thus people's perceptions are relative to their spoken language.

Linguists

Specialists in the study of language, including its structure, development, and relationship among languages.