Investment and Selling Price Essay

Turnhilm, Inc. is considering adding a small electric mower to its merchandise line. trouble believes that in order to be competitive, the mower cannot be impairmentd above $139. The party requires a minimum return of 25% on its investitures. Launching the spic-and-span intersection point 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 live of a mower. 57. The worry of Hettler Corporation would like to set the selling price on a crude-fangled product utilize the assimilation make up approach to undetermined pricing. The companys accounting department has supplied the following estimates for the sore product Management plans to produce and sell 4,000 units of the new product yearlyly. The new product would require an investment of $643,000 and has a required return on investment of 20%. Required a. locate the unit product cost for the new product. b.Determine the markup percentage on ab sorption cost for the new product. c. Determine the target selling price for the new product using the absorption costing approach. 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 set 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 s elling price for the new product using the absorption costing approach.