Valmont Company developed a new industrial piece of equipment called the XP$-200.$ The company is considering two methods of establishing a selling price for the XP$-200-$absorption cost$-$plus pricing and value$-$based pricing.Valmont's cost accounting system reports an absorption unit product cost for XP$-200$ of $$9,300.$ Its markup percentage on absorptio cost is $85\%.$ The company's marketing managers have expressed concerns about the use of absorption cost$-$plus pricing because ill seems to overlook the fact that the XP$-200$ offers superior performance relative to the comparable piece of equipment sold by Valmont's primary competitor. More specifically, the XP$-200$ can be used for $18,000$ hours before replacement. It only requires $$1,900$ of preventive maintenance during its useful life and it consumes $$165$ of electricity per $900$ hours used.These figures compare favorably to the competing piece of equipment that sells for $$18,000,$ needs to be replaced after $9,000$ hours of use, requires $$3,800$ of preventive maintenance during its useful life, and consumes $$194$ of electricity per $900$ hours used.Required:$1.$ If Valmont uses absorption cost$-$plus pricing, what price will it establish for the XP$-200?2.$ What is XP$-200\text{'}$s economic value to the customer $($EVC$)$ over its $18,000-$hour life?$3.$ If Valmont uses value$-$based pricing, what range of possible prices should it consider when setting a price for the XP$-200?$