A company must incur annual fixed costs of $4,000,000 and variable costs of $400 per unit and estimates that it can sell 40,000 pumps annually and marks up cost by 30 percent. Using cost-plus pricing

A company must incur annual fixed costs of $4,000,000 and variable costs of $400 per unit and estimates that it can sell 40,000 pumps annually and marks up cost by 30 percent. Using cost-plus pricing, what is the cost per unit and the price? What are advantages and disadvantages of cost-plus pricing?

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