Product pricing using the cost-plus approach concepts; differential analysis report for accepting additional business
Twilight Lumina Company recently began production of a new product, the halogen light. which required an investment of $1,200,000 in assets. The costs of producing and selling 20.000 halogen lights are estimated as follows:
Twilight Lumina Company is currently considering establishing a selling price for the halogen light. The president of Twilight Lumina Company has decided to use the cost-plus approach to product pricing and has indicated that the halogen light must earn a 20% rate of return on invested assets.
Instructions
Common on any additional considerations that could influence establishing the selling price for the halogen light.
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