Exam 12: Differential Analysis and Product Pricing

What cost concept used in applying the cost-plus approach to product pricing includes total manufacturing costs and total selling and administrative expenses in the "cost" amount to which the markup is added?

Red Co.uses the product cost concept of applying the cost-plus approach to product pricing.Given below is cost information for the production and sale of 40,000 units of its sole product.Red Co.desires a profit equal to a 15% rate of return on invested assets of $1,200,000. ? Fixed factory overhead cost \ 80,000.00 Fixed selling and administrative costs 140,000.00 Variable direct materials cost per unit 7.00 Variable direct labor cost per unit 11.00 Variable factory overhead cost per unit 3.00 Variable selling and administrative cost per unit 2.00 ? The unit selling price for the company's product is: