Investment and Selling Price Essay

Turnhilm, Inc. is considering adding a small electric mower to its product line. Management believes that in order to be competitive, the mower cannot be priced above $139. The company takes a minimum chip in of 25% on its investments. Launching the in the raw product would require an investment of $8,000,000. Sales are expected to be 40,000 units of the mower per year.Required Compute the target personify of a mower. 57. The management of Hettler Corporation would like to localize the change price on a new product utilise the absorption costing progression to cost-plus pricing. The companys accounting department has supplied the following estimates for the new product Management plans to constitute and sell 4,000 units of the new product annually. The new product would require an investment of $643,000 and has a required return on investment of 20%. Required a. examine the unit product cost for the new product. b.Determine the markup percentage on absorption cost for the n ew product. c. Determine the target marketing price for the new product using the absorption costing mount. 58. Bourret Corporation is introducing a new product whose direct materials cost is $42 per unit, direct labor cost is $16 per unit, variable manufacturing overhead is $9 per unit, and variable selling and administrative expense is $3 per unit. The annual fixed manufacturing overhead associated with the product is $84,000 and its annual fixed selling and administrative expense is $16,000.Management plans to produce and sell 4,000 units of the new product annually. The new product would require an investment of $1,022,400 and has a required return on investment of 10%. Management would like to dance orchestra the selling price on a new product using the absorption costing approach to cost-plus pricing. 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 target selling pri ce for the new product using the absorption costing approach.