Answer to Question #117308 in Other for Sharon shreshta lal

Question

ABC Limited is developing a new clothes dryer, Dry Master, that it plans to sell to coin operated laundries. Currently, the market leader is a product called Dry Well, which is sold by a competitor. The management accountant of the company is doing a market research to determine appropriate selling price for the new clothes dryer. The management accountant gathered the following information regarding the cost of developing 400 new cloth dryer. Variable Costs: Manufacturing $194,000 Sales Commission $20,000 Total Variable Cost $214,000 Fixed Cost Allocated Manufacturing $130,000 Total Fixed Cost $130,000 Total Cost $344,000 Management decided that the required markup is 30%. Required: 1.Calculate the selling price if the company decides to use absorption cost and calculate the selling price if the company decides to price total variable cost.

Answer 1

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