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Aldean Company wants to use absorption cost-plus pricing to set the selling price on a...

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Accounting

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Aldean Company wants to use absorption cost-plus pricing to set the selling price on a new product. The company plans to invest $130,000 in operating assets to produce and sell 13,000 units. Its required return on investment (ROI) in its operating assets is 18%. The accounting department has provided cost estimates for the new product as shown below: Total Per Unit $7.40 $5.40 $2.40 Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling and administrative expenses Fixed selling and administrative expenses $ 96,850 $1.40 $ 46,735 Required: 1. What is the unit product cost for the new product? (Round intermediate calculations and final answer to 2 decimal places.) 2. What is the markup percentage on absorption cost for the new product? (Round intermediate calculations to 2 decimal places.) 3. What selling price would the company establish for its new product using a markup percentage on absorption cost? (Round intermediate calculations and final answer to 2 decimal places.) 1. Unit product cost 2 Markup percentage on absorption cost 3. Selling price per unit %

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