PR 24-5A Product pricing using the cost-plus approach concepts; differential analysis for accepting additional business Display Labs Inc. recently began production of a new product, flat panel displays, which required the investment of $1,800,000 in assets. The costs of producing and selling 2,000 units of flat panel displays are estimated as follows: Variable costs per unit: Direct materials Direct labor Factory overhead Selling and administrative expenses Fixed costs: Factory overhead Selling and administrative expenses $360,000 180,000 $ 90 20 40 35 $185 Total Display Labs Inc. is currently considering establishing a selling price for flat panel displays. The president of Display Labs has decided to use the cost-plus approach to product pricing and has indicated that the displays must earn a 20% rate of return on invested assets. Instructions 1. Determine the amount of desired profit from the production and sale of flat panel displays. 2. Assuming that the product cost concept is used, determine (a) the cost amount per unit, (b) the markup percentage, and ) the selling price of flat panel displays. 3. Appendix: Assuming that the total cost concept is used, determine (a) the cost amount per unit, (b) the markup percentage (rounded to two decimal places), and c) the selling price of flat panel displays (rounded to nearest whole dollar). 4. Appendix: Assuming that the variable cost concept is used, determine (a) the cost amount per unit, (b) the markup percentage (rounded to two decimal places), and (c) the selling price of flat panel displays (rounded to nearest whole dollar)