Question
Please, help me these 3 questions! 1.Ember Manufacturing Company (EMC) uses target return pricing and expects to sell 40,000 units of its product in the
Please, help me these 3 questions!
1.Ember Manufacturing Company (EMC) uses target return pricing and expects to sell 40,000 units of its product in the coming year. EMCs fixed costs will be $500,000 and its variable costs will be about $20 per unit. If EMC seeks to earn a 10 percent return on its investment of $1,000,000, what price should it charge?
A. $21.00
B. $22.50
C. $20.00
D. $35.00
E.$32.50
2. You manage a multinational firm that has newly acquired King Kustoms. You have imposed a target return requirement of 25% on all existing divisions, and a 30% target return on all newly formed and newly acquired divisions. In analyzing newly acquired King Kustoms, you have identified $2,000,000 in investment and Fixed costs on $500,000. Variable cost per unit is $10. Sales records support the expectation that 10,000 units can be sold. With that level of sales, what price must be charged to achieve the required return on investment?
A. $50
B. $60
C. $100
D. $110
E. $120
3. Golf Links, LTD. requires its business units to earn a 20% return on investment, or the unit risks being sold. You have been newly appointed to its apparel division, and want to make sure the division is on target to make its ROI objective, so you request an assessment of the how many units your division must sell in the next year in order to achieve the Target Return requirement. Your staff advises that your units investment is $2,000,000. Your total fixed costs are $600,000. The average price you charge to the wholesaler for the apparel you produce is $50. In studying the variable costs for producing your products, it is estimated that you spend approximately $10 per unit. How many units must your division sell to achieve its target return?
A. 65,000
B.50,000
C. 25,000
D. 15,000
E. 10,000
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