Diamond Visual Entertainment 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 5,000 units of flat panel displays are estimated as follows:Variable Costs:Variable Cost Amount:Fixed Costs:Fixed Cost Amount:Direct materials$120Factory overhead$240,000Direct labor35Selling and admin expenses150,000Variable overhead52Total Fixed costs390,000Selling and admin expenses38 Total variable costs245 Diamond Visual Entertainment Inc. is currently considering establishing a selling price for flat panel displays. The president of Diamond Visual Entertainment has decided to use the cost-plus approach to product pricing and has indicated that the displays must earn a 17% return on invested assets.A. Comment on any additional considerations that could influence establishing the selling price for flat panel displays.

Cost accounting is the branch of accounting that inspects the cost structure of a business. This…

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Diamond Visual Entertainment 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 5,000 units of flat panel displays are estimated as follows:

Variable Costs:	Variable Cost Amount:	Fixed Costs:	Fixed Cost Amount:
Direct materials	$120	Factory overhead	$240,000
Direct labor	35	Selling and admin expenses	150,000
Variable overhead	52	Total Fixed costs	390,000
Selling and admin expenses	38
Total variable costs	245

Diamond Visual Entertainment Inc. is currently considering establishing a selling price for flat panel displays. The president of Diamond Visual Entertainment has decided to use the cost-plus approach to product pricing and has indicated that the displays must earn a 17% return on invested assets.

A. Comment on any additional considerations that could influence establishing the selling price for flat panel displays.

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