QUESTION 2 Open with Cool Equipment manufactures and sells portable fridges. The company is planning to introduce its ne

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Question 2 Open With Cool Equipment Manufactures And Sells Portable Fridges The Company Is Planning To Introduce Its Ne 1 (122.78 KiB) Viewed 13 times

QUESTION 2 Open with Cool Equipment manufactures and sells portable fridges. The company is planning to introduce its newest portable fridge model -40FX. The average cost of producing and selling one unit of 40FX follows (based on budgeted production and sales of 10,000 units): RM 150.00 92.50 20.00 27.50 6.00 4.00 Direct materials Direct labours Variable manufacturing overhead Fixed manufacturing overhead Variable selling expense Fixed selling expense There is an identical product of a comparable quality in the market that sells for RM350 per unit. Required: Each question should be treated independently. 1. Assume that the company has invested RM1,200,000 in the production of the 40FX model. Calculate the unit selling price for 40FX model if the company uses an absorption costing approach to cost-plus pricing, and desires a 40% rate of return on all investments in its products. (7 marks)