Good Day,

I would like help with solutions to the attached questions.

Thank you.

Question 1 Tory Company sells a single product. Troy estimates demand and costs at various 1 activity levels as follows: Units Sold Price 120,000 $48 155,500 $45 160,000 $40 180,000 $35 200,000 $30 Total Variable Costs Fixed Costs $3,000,000 $1,000,000 $3,520,000 $1,000,000 $4,000,000 $1,000,000 $4,500,000 $1,000,000 $5,000,000 $1,000,000 How much profit will Troy have if a price of $45 is charged? Answer Question 2 The Falling Snow Company is considering production of a lighted world globe that the company would price at a markup of 0.25 above full cost. Management estimates that the variable cost of the globe will be $62 per unit and fixed costs per year will be $240,000. Assuming sales of 1,200 units, what is the full selling price of a globe with a 0.25 markup? Question 3 A company believes it can sell 5,600,000 of its proposed new optical mouse at a 3 price of $10.50 each. There will be $8,000,000 in fixed costs associated with the mouse. If the company desires to make a profit $2,000,000 on the mouse, what is the target variable cost per mouse? Answer Question 4 4 Wizard Corporation has analyzed their customer and order handling data for the past year and has determined the following costs: Order processing cost per order $7 $8.00 Additional costs if order must be expedited (rushed) Customer technical support $12 calls (per call) $1200 Relationship management costs (per customer per year) In addition to these costs, product costs amount to 75% of Sales. In the prior year, Wizard had the following experience with one of its customers, Chester Company: Sales $16,00 0 Number of orders 160 Percent of orders marked rush 70% Calls to technical support 80 Required: Calculate the profitability of the Chester Company account. Question 5 (1 point) When a firm adds a predetermined percentage to the cost of its product for pricing purposes, it is called: Question 5 options: incremental pricing demand pricing cost-plus pricing cost plus demand pricing Question 6 PowerDrive, Inc. produces a hard disk 6 drive that sells for $175 per unit. The cost of producing 25,000 drives in the prior year was: Direct $625,000 material Direct 375,000 labor Variable overhea 125,000 d Fixed overhea 1,500,000 d Total $2,625,000 cost At the start of the current year, the company received an order for 3,800 drives from a computer company in China. Management of PowerDrive has mixed feelings about the order. On the one hand they welcome the order because they currently have excess capacity. Also, this is the company's first international order. On the other hand, the company in China is willing to pay only $140 per unit. What will be the effect on profit of accepting the order? Answer: Question 7 Another name for menu-based pricing is: 7 Question 7 options: Cost-plus pricing Customer profitability pricing Profit maximizing pricing Activity-based pricing Question 8 A company has $30 per unit in variable costs and $1,200,000 per year in fixed 8 costs. Demand is estimated to be 106,000 units annually. What is the price if a markup of 40% on total cost is used to determine the price