Quare Company makes 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 35,000 units per year.
The company has invested $100,000 in this product and expects a return on investment of 11%.
Required:
a.Compute the markup on absorption cost.
b.Compute the selling price of the product using the absorption costing approach.
c.Assume that every 10% increase in price leads to a 14% decrease in quantity sold.Assuming no change in cost structure and that direct labor is a variable cost,compute the profit-maximizing price.
Definitions:
Accumulated Depreciation
represents the total amount of depreciation expense that has been recorded for an asset since it was acquired.
Cost Of Goods Purchased
The amount a company spends to buy or produce the products it sells to customers, excluding operating expenses.
Cost Of Goods Sold
Signifies the immediate expenses related to the manufacturing of products that a company sells.
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