If the Transformer Division utilizes cost-based pricing and uses a markup based on its target rate of return, what price per unit (rounded to the nearest dollar) should it use for the budget?

The Transformer Division of Keller Electrical Supply IS developing its Budget for next year Preliminary estimates for the next year are as follows.

• Sales of 10.000 units

• Variable cost of $350 per unit

• Fixed costs of $800,000

. Net assets utilized on the Transformer Division are $7 million

• Target rate of return on investment required by Keller is 15%

If the Transformer Division utilizes cost-based pricing and uses a markup based on its target rate of return, what price per unit (rounded to the nearest dollar) should it use for the budget?

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