Longwood, Inc. manufactures various lines of computer equipment and is planning to introduce a new line of laptops. Current plans call for the production and sale of 1,000 units, with estimated costs as follows:     Variable costs:       Manufacturing$450,000     Selling and Administrative 100,000     Total variable costs    $550,000 Fixed costs:       Manufacturing$300,000     Selling and Administrative 180,000     Total fixed costs     480,000 Total costs    $1,030,000 The average amount of capital invested in the laptop product line is $900,000 and Longwood's target return on investment is 18%. What price must Longwood charge if the company uses cost-plus pricing based on total variable cost?

A. $712.
B. $900.
C. $1,192.
D. $1,030.
E. None of the answers is correct.


Answer: C

Business

You might also like to view...

A U.S. company is exempt from the Foreign Corrupt Practices Act if a host-country citizen serving as an agent for the company pays a bribe to a government official in the host country

Indicate whether the statement is true or false

Business

Which of the following is a disadvantage associated with advertising in magazines?

A. lack of prestige B. limited reach and frequency C. absence of consumer receptivity to ads D. creative inflexibility E. lack of permanence

Business

Unless otherwise expressly stated, an auction is considered an auction without reserve.

Answer the following statement true (T) or false (F)

Business

Why was accounting transparency an important issue in the P&G-BT swap controversy?

What will be an ideal response?

Business