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Problem:

Assume a clinical laboratory is considering a new test. Here are the key assumptions: annual fixed direct costs = $20,000, annual overhead allocation = $10,000, variable cost per test = $5, and expected volume = 5,000 tests.

Task:

a) What price should be set under full cost pricing?

b) What price should be set under marginal cost pricing?

Illustrate in detail clarify all workings.

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M91146804

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