Could you please answer this question: Holding all other things constant, an increase in the company's...
Could you please answer this question:
Holding all other things constant, an increase in the company's required return on investment (ROI) will affect:
Select one:
a. the selling price under the absorption costing approach to cost-plus pricing
b. the profit-maximizing price.
c. both the selling price under the absorption costing approach to cost-plus pricing and the profit-maximizing price.
d. neither the selling price under the absorption costing approach to cost-plus pricing nor the profit-maximizing price.
Homework Answers
Correct answer is: a. the selling price under the absorption costing approach to cost plus pricing
If ROI of the company increase keeping the other factor constant it will selling price under the absorption costing to cost plus pricing will be affected.
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Could you please answer this question:
Holding all other things constant, an increase in the company's...
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PROBLEM 12A-12 Absorption Costing Approach to Cost-Plus Pricing: Customer Latitude and Pricing L012-8, L012-9 Messina Company wants to use absorption cost-plus pricing to establish the selling price to product. The company plans to invest $650,000 in operating assets that provide the capas make 30,000 units. Its required return on investment (ROI) in its operating assets is 20%. Accounting Department set a goal of producing and selling 20,000 units during the new proc first year of availability. It also provided the...
Kirgan, Inc., manufactures a product with the following costs: Per Year Per Unit $26.40 $15.40 $ 3.60 Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling and administrative expenses Fixed selling and administrative expenses $1,545,600 $ 3.50 $1,514,700 The company uses the absorption costing approach to cost-plus pricing described in the text. The pricing calculations are based on budgeted production and sales of 96,000 units per year. The company has invested $370,000 in this product and expects...
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