Aldean Company wants to use absorption cost-plus pricing to set the selling price on a new product. The company plans to invest $150,000 in operating assets to produce and sell 15,000 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:
Per Unit Total
Direct materials $ 7.60
Direct labor $ 5.60
Variable manufacturing overhead $ 2.60
Fixed manufacturing overhead Variable selling and administrative expenses $ 1.60
Fixed selling and administrative expenses $ 68,085
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.)
