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Aldean Company wants to use absorption cost-plus pricing to set the selling price on a...

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Accounting

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Aldean Company wants to use absorption cost-plus pricing to set the selling price on a new product. The company plans to invest $120,000 in operating assets to produce and sell 12,000 units. Its required return on investment (ROI) in its operating assets is 18% The accounting department has provided cost estimates for the new product as shown below Per Unit $7.30 $5.30 $2.30 Total Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling and administrative expenses Fixed selling and administrative expenses 88,800 $1.30 69,840 Required: 1. What is the unit product cost for the new product? (Round intermediate calculations and final answer to 2 decimal places.) 2. What is the markup percentage on absorption cost for the new product? (Round intermediate calculations to 2 decimal places.) 3. What selling price would the company establish for its new product using a markup percentage on absorption cost? (Round intermediate calculations and final answer to 2 decimal places.)

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