Designs by Breanne is a graphic design studio specializing in logos and business stationery. Breanne made a $65,000 investment in her company and desires a 12% return. Annually, she designs and prints 3,000 orders. Her costs include
…………………………………………Variable………………………. Fixed
Design costs ……………………..$ 45 per order…………… $50,000 per year
Production costs ………………..$ 125 per order…………… $39,000 per year
Marketing costs……………………………………………….. $ 2,500 per year
Shipping costs …………………..$ 15 per order
REQUIRED
A. Determine the mark-up percentage using
1. Absorption cost-based pricing
2. Variable cost-based pricing
3. Total cost-based pricing
B. Determine the selling price for each mark-up percentage calculated in Part 1.
C. Discuss the other factors that Breanne must consider when setting her selling prices?
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