Question

Based on the data presented in Exercise 12-15, assume that StarMed Products Inc. uses the variable cost concept of applying the cost-plus approach to product pricing.
In Exercise 12-15, StarMed Products Inc. uses the total cost concept of applying the cost-plus approach to product pricing. The costs of producing and selling 100,000 units of medical tablets are as follows:


StarMed Products desires a profit equal to a 20% rate of return on invested assets of $15,000,000.
a. Determine the variable costs and the cost amount per unit for the production and sale of 100,000 units of medical tablets.
b. Determine the variable cost markup percentage per unit. Round to two decimal place.
c. Determine the selling price per unit. Round to the nearestdollar.


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  • CreatedMarch 11, 2014
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