Schwinn started producing a new product which requires an investment of $2,000,000 in assets. The costs to produce and sell 75,000 units are as follows. Additionally, the Company's policy is to earn 8% return on invested assets. How should they price the items using the Product Cost Method? Variable Costs: Fixed Costs: DM $8.00/unit Factory OH $750,000 $5.00 / unit SG&A $300,000 DL FOH $3.50 /unit SG&A $4.50/unit Total 22.00 / unit

Schwinn started producing a new product which requires an investment of $2,000,000 in assets. The costs to produce and sell 75,000 units are as follows. Additionally, the Company's policy is to earn 8% return on invested assets. How should they price the items using the Product Cost Method? Variable Costs: Fixed Costs: DM $8.00/unit Factory OH $750,000 $5.00 / unit SG&A $300,000 DL FOH $3.50 /unit SG&A $4.50/unit Total 22.00 / unit

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter11: Differential Analysis And Product Pricing

Section: Chapter Questions

Problem 16E

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