Valmont's cost accounting system reports an absorption unit product cost for XP-200 of $9,500. Its...
50.1K
Verified Solution
Link Copied!
Question
Accounting
Valmont's cost accounting system reports an absorption unit product cost for XP of $ Its markup percentage on absorption cost is The company's marketing managers have expressed concerns about the use of absorption costplus pricing because it seems to overlook the fact that the XP offers superior performance relative to the comparable piece of equipment sold by Valmont's primary competitor. More specifically, the XP can be used for hours before replacement. It only requires $ of preventive maintenance during its useful life and it consumes $ of electricity per hours used. These figures compare favorably to the competing piece of equipment that sells for $ needs to be replaced after hours of use, requires $ of preventive maintenance during its useful life, and consumes $ of electricity per hours used. Required: If Valmont uses absorption costplus pricing, what price will it establish for the XP What is XPs economic value to the customer EVC over its hour life? If Valmont uses valuebased pricing, what range of possible prices should it consider when setting a price for the XP 
Valmont's cost accounting system reports an absorption unit product cost for XP of $ Its markup percentage on absorption cost is The company's marketing managers have expressed concerns about the use of absorption costplus pricing because it seems to overlook the fact that the XP offers superior performance relative to the comparable piece of equipment sold by Valmont's primary competitor. More specifically, the XP can be used for hours before replacement. It only requires $ of preventive maintenance during its useful life and it consumes $ of electricity per hours used.
These figures compare favorably to the competing piece of equipment that sells for $ needs to be replaced after hours of use, requires $ of preventive maintenance during its useful life, and consumes $ of electricity per hours used.
Required:
If Valmont uses absorption costplus pricing, what price will it establish for the XP
What is XPs economic value to the customer EVC over its hour life?
If Valmont uses valuebased pricing, what range of possible prices should it consider when setting a price for the XP
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
- Unlimited Question Access with detailed Answers
- Zin AI - 3 Million Words
- 10 Dall-E 3 Images
- 20 Plot Generations
- Conversation with Dialogue Memory
- No Ads, Ever!
- Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Other questions asked by students
StudyZin's Question Purchase
1 Answer
$0.99
(Save $1 )
One time Pay
- No Ads
- Answer to 1 Question
- Get free Zin AI - 50 Thousand Words per Month
Best
Unlimited
$4.99*
(Save $5 )
Billed Monthly
- No Ads
- Answers to Unlimited Questions
- Get free Zin AI - 3 Million Words per Month
*First month only
Free
$0
- Get this answer for free!
- Sign up now to unlock the answer instantly
You can see the logs in the Dashboard.