Trevor Company is contemplating the introduction of a new product.The company has gathered the following information concerning the product: 
The company uses the absorption costing approach to cost-plus pricing as described in the text.
Required:
a.Compute the markup on absorption cost.
b.Compute the selling price.
c.If the price computed in "b" above is charged,and costs turn out as projected,can the company be assured that no loss will be sustained on the new product? Explain.
Definitions:
Good Faith
An honest intention to act without taking an unfair advantage over another party, typically in contractual or negotiation contexts.
Financing Company
An organization that provides money or credit to individuals or companies for purchases or investments.
Reasonable Notice
A requirement for the provision of timely and clear information to all parties involved in a legal agreement or procedure.
Written Notice
A formal, documented communication required in many legal situations to officially inform a party of certain actions or intentions.
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