The Management of Archut Corporation Would Like to Set the Selling

question 54

Essay

The management of Archut Corporation would like to set the selling price on a new product using the absorption costing approach to cost-plus pricing.The company's accounting department has supplied the following estimates for the new product: Management plans to produce and sell 9, 000 units of the new product annually.The new product would require an investment of $3, 002, 400 and has a required return on investment of 10%.
Required:
a.Determine the unit product cost for the new product.
b.Determine the markup percentage on absorption cost for the new product.
c.Determine the selling price for the new product using the absorption costing approach.

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Definitions:

Government Aid Agencies

Public entities that provide resources and assistance to countries or regions in need.

Nonprofit Organizations

Organizations that operate for the public or social benefit, without the primary goal of making profits for shareholders or owners.

Charitable Goals

Objectives set by individuals or organizations aimed at providing aid or support for philanthropic or humanitarian purposes.

Foundation

An underlying basis or principle for something, or an organization established to support charitable, educational, or other purposes.