Question
1. Back Bay Company is a price - taker and uses target pricing. Refer to the following information: Production volume 600, 000 units per year
1. Back Bay Company is a price - taker and uses target pricing. Refer to the following information:
Production volume 600, 000 units per year
Market price $30 per unit
Desired operating income 17 % of total assets
Total assets $ 13, 800, 000
What is the target full product cost per unit? (Round your answer to nearest cent.) Assume all units produced are sold.
A. $5.10
B. $26.09
C. $24.90
D. $30.00 15.
2. Battista Stationery Company is a price - taker and uses target pricing. The company has completed an analysis of its revenues, costs, and desired profits and has calculated its target full product cost. Refer to the following information:
Target full product cost $500, 000 per year
Actual fixed cost $280, 000 per year
Actual variable cost $3 per unit
Production volume 150, 000 units per year
Actual costs are currently higher than target full product cost. Assume all products produced are sold. Assuming that variable costs are dependent on commodity prices and cannot be reduced, what is the target fixed cost?
A. $450, 000
B. $220, 000
C. $50, 000
D. $500, 000
3. Blair Stationery Company is a price - taker and uses target pricing. The company has just done an analysis of its revenues, costs, and desired profits and has calculated its target full product cost. Assume all products produced are sold. Refer to the following information:
Target full product cost $510, 000 per year
Actual fixed cost $250, 000 per year
Actual variable cost $2 per unit
Production volume 151, 000 units per year
Actual costs are currently higher than target full product cost. Assuming that fixed costs cannot be reduced, what are the target total variable costs?
A. $302, 000
B. $510, 000
C. $260, 000
D. $250, 000
4. Sparks Stationery Company is a price - taker and uses target pricing. The company has just done an analysis of its revenues, costs, and desired profits and has calculated its target full product cost. Assume all products produced are sold. Refer to the following information:
Target full product cost $500, 000 per year
Actual fixed cost $280, 000 per year
Actual variable cost $3 per unit
Production volume 151, 000 units per year
Actual costs are currently higher than target full product cost. Assuming that fixed costs cannot be reduced, what is the target variable cost per unit? (Round your answer to the nearest cent.)
A. $1.46
B. $3.00
C. $1.85
D. $3.31
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