The management of Landstrom Corporation would like to set the selling price on a new...
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Accounting
The management of Landstrom 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: Per Year Per Unit $ 27 $ 17 $ 10 Direct materials Direct labor Variable manufacturing overhead Fixed annual manufacturing overhead Variable selling and administrative expenses Fixed annual selling and administrative expenses $ 60,000 $ 5 $ 6,800 Management plans to produce and sell 5,000 units of the new product annually. The new product would require an investment of $520,000 and has a required return on investment of 18%. 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. (Round your intermediate and final answer to 2 decimal places.)
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