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Valmont Company has 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 $9,700. Its markup percentage on absorption cost is 85%. The company's marketing managers have expressed concerns about the use of absorption cost-plus pricing because it 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 22,000 hours before replacement. It only requires $2,300 of preventive maintenance during its useful life and it consumes $185 of electricity per 1,100 hours used These figures compare favorably to the competing piece of equipment that sells for $22,000, needs to be replaced after 11,000 hours of use, requires $4,600 of preventive maintenance during its useful life, and consumes $218 of electricity per 1,100 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's economic value to the customer (EVC) over its 22,000-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? Complete this question by entering your answers in the tabs below Req 1 and 2 Req 3 If Valmont uses absorption cost-plus pricing, what price will it establish for the XP-200? What is XP-200's economic value to the customer (EVC) over its 22,000-hour life? 1. Selling price per unit 2. EVC

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