ABC Limited is developing a new clothes dryer, Dry Master, that it plans to sell to coin operated laundries. Currently, the market leader is a product called Dry Well, which is sold by a competitor. The management accountant of the company is doing a market research to determine appropriate selling price for the new clothes dryer.
The management accountant gathered the following information regarding the cost of developing 400 new cloth dryer.
Sales Commission $20,000
Total Variable Cost $214,000
Fixed Cost Allocated
Total Fixed Cost $130,000
Total Cost $344,000
Management decided that the required markup is 30%.
1.Calculate the selling price if the company decides to use absorption cost and calculate the selling price if the company decides to price total variable cost.
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