Reference no: EM132822137

Johnson Marine has the following costs and expected sales from the coming year. Johnson is considering a number of different methods to determine the price of its product.

Variable Manufacturing: 2,350,000
Variable Selling and Administrative: 750,000
Plant-level Fixed Overhead: 1,200,000
Fixed Selling and Administrative 600,000
Batch-level Fixed Overhead: 200,000
Total Investment in Product Line: 10,000,000
Expected Sales (units) 20,000

Problem 1: If Johnson determines prices so as to received a desired return on assets of 15%, the price is:

a) $262.50
b) $375.00
c) $364.29
d) $306.00
e) $330.00