Dexter, Inc. manufactures various lines of computer equipment and is planning to introduce a new line of laptops. Current plans call for the production and sale of 1,000 units, with estimated costs as follows: The average amount of capital invested in the laptop product line is $900,000 and Dexter's target return on investment is 18%.
What price must Dexter charge if the company uses cost-plus pricing based on total variable cost?
A) $712.
B) $900.
C) $1,030.
D) $1,192.
E) None of the other answers are correct.

Question

Dexter, Inc. manufactures various lines of computer equipment and is planning to introduce a new line of laptops. Current plans call for the production and sale of 1,000 units, with estimated costs as follows:  The average amount of capital invested in the laptop product line is $900,000 and Dexter's target return on investment is 18%.
What price must Dexter charge if the company uses cost-plus pricing based on total variable cost?
A) $712. 
B) $900. 
C) $1,030. 
D) $1,192. 
E) None of the other answers are correct.

Quizplus · Accepted Answer

The Answer of Dexter, Inc. manufactures various lines of computer equipment and is planning to introduce a new line of laptops. Current plans call for the production and sale of 1,000 units, with estimated costs as follows:  The average amount of capital invested in the laptop product line is $900,000 and Dexter's target return on investment is 18%.
What price must Dexter charge if the company uses cost-plus pricing based on total variable cost?
A) $712. 
B) $900. 
C) $1,030. 
D) $1,192. 
E) None of the other answers are correct.