Explanation

Correct Answer: B (USD 0.65)

In cost-plus pricing, the price is calculated as:

Price = Operating Expense + Overhead Cost + Required Profit

Using the given data:

• Operating expense per ATM visit: USD 0.25
• Estimated overhead cost allocated per ATM visit: USD 0.35
• Profit required per ATM visit: USD 0.05

Calculation: 0.25 + 0.35 + 0.05 = USD 0.65

Why other options are incorrect:

• A (USD 0.30): Only includes operating expense (0.25) and profit (0.05), but neglects the overhead cost (0.35)
• C (USD 0.70): Incorrectly adds an additional return on capital fee to the overhead cost (0.15 × 0.35 = 0.0525), which is already captured in the required profit
• D (USD 0.74): Incorrectly adds an additional return on capital fee to both operating expense and overhead cost (0.15 × (0.25 + 0.35) = 0.09), which is already captured in the required profit

The target return on capital (15%) is already incorporated into the required profit per ATM visit (USD 0.05), so it should not be added again to the calculation.