Business & Finance Assignment | Custom Assignment Help
September 26th, 2019
HD Labs Inc. recently began production of a new product, flat panel displays, which required the investment of $1,500,000 in assets. The costs of producing and selling 12,000 units of flat panel displays are estimated as follows:
- Variable costs per unit:
- Direct materials $140
- Direct labor 30
- Factory overhead 50
- Selling and administrative expenses 25
- Total $245
Fixed costs:
- Factory overhead $960,000
- Selling and administrative expenses 480,000
HD Lavs Inc. is currently considering establishing a selling price for flat panel displays. The president of HD Labs had decided to use the cost-plus approach to product pricing and has indicated that the displays must earn a 20% rate of return on invested assets.