(a)
Total cost pricing: It is an approach to fix a price of a product that includes all the costs such as all variable costs and fixed costs associated for manufacturing a product.
To determine: The total cost per unit of a mechanical alligator
(b)
Formula for desired ROI per unit:
To determine: The desired ROI per session for Corporation S
(c)
Markup percentage: The percentage of return on investment (ROI) achieved per unit over the total cost of production per unit, is referred to as markup percentage.
Formula for mark-up percentage, under absorption-cost pricing approach:
Absorption-cost Pricing: It is an approach to fix a price of a product that includes only the variable and fixed manufacturing overhead costs incurred for manufacturing a product.
To compute: The markup percentage for mechanical alligators of Corporation S, under absorption-cost pricing approach
(d)
Variable-cost pricing: This pricing approach is used by the companies to set the target selling price based on all variable manufacturing costs, but fixed costs, plus desired profit.
Markup percentage: The percentage of return on investment (ROI) achieved per unit over the total cost of production per unit, is referred to as markup percentage.
Formula for mark-up percentage, under variable-cost pricing approach:
To compute: The markup percentage for mechanical alligators of Corporation S, under variable-cost pricing approach
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