ACCT346 Company Incur Annual Fixed Costs

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ACCT346 Company Incur Annual Fixed Costs
(TCO 8) A company must incur annual fixed costs of $4,000,000 and variable co…

 

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ACCT346 Company Incur Annual Fixed Costs

ACCT346 Company Incur Annual Fixed Costs

Final Exam A+

(TCO 8) A company must incur annual fixed costs of $4,000,000 and variable costs of $400 per unit and estimates that it can sell 40,000 pumps annually and marks up cost by 30 percent.  Using cost-plus pricing, what is the cost per unit and the price? What are advantages and disadvantages of cost-plus pricing?(Points : 30)

Assumption: Cost-plus pricing is based on full-cost…