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The following information pertains to questions #4-#14. You may refer to the information in this spacer to compute the correct price for questions 4-14. You

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The following information pertains to questions #4-#14. You may refer to the information in this spacer to compute the correct price for questions 4-14. You may do your computations using a calculator or in your head. Your company has developed a new coffee maker and branded it as the Coffeex. It has the unique attribute of converting the solar energy to heat and keep the liquid content of the CoffeeX warm until the last drop is consumed. It will be mass marketed to everybody. You have established a production capacity of 2,000 units but are now producing 1,000 units for a test market in Washington State. You would like to see consumer reactions to your new product. You need to set a price, using the cost-plus method. The following is a set of data, which you need for your price- setting task: Assets Employed: $20,000 Desired Rate of Return On Investment (ROI): 30% Production Capacity: 2,000 units Current Production: 1,000 units Variable Costs: Production: Direct Material: $4.00 Direct Labor: $3.00 Direct Overhead: $1.00 Marketing: Packaging $3.00 Assets Employed: $20,000 Desired Rate of Return On Investment (ROI): 30% Production Capacity: 2,000 units Current Production: 1,000 units Variable Costs: Production: Direct Material: $4.00 Direct Labor: $3.00 Direct Overhead: $1.00 Marketing: Packaging $3.00 Fixed Costs (for all units of Current Production) R&D Costs (all fixed); $1,000 Production $5,000 (depreciation charges) Marketing Fixed Cost: Financing Fixed Cost: $2,000 (advertising) $1,000 (interest on loans) $3.000 (salaries) Administration Fixed Cost: Desired Proht: 30% ROI (Return On Investment-Assets Employed) The going rate price for a comparable Coffeex is $32.00 MacBook Air Question 4 1 pts What would be your not-for-profit price? O $32.00 O $11.00 $23.00 $29.00 O $34.12 Question 5 1 pts What would be your cost-based, for-profit price? $29.00 $12.00 O $27.00 O $25.00 $32.00 Question 6 1 pts A market situation has arisen where you need to sell more quantity and take a larger market share in order to challenge the competitors by selling below their prices. You need to maintain a minimum of $3 profit per unit. Which of the following prices would you set on your CoffeeX? $23.00 O $11.00 O $12.00 O $26.00 $32.00 > Question 7 1 pts What is the name of the above pricing strategy? O Everyday value pricing O Market skimming pricing O Market Penetration Pricing Odd pricing Customary Pricing A youth mountaineering camp would like to order 200 units but cannot afford your current price. You would like to price your product at a minimum level while earning the same profit per unit that you are currently making in the domestic market. This order is on the top of 1,000 units of the CoffeeX, which you have already sold in domestic markets. Your price to the mountaineering camp would be: O $12.00 O $29.00 O $39.00 $34.12 O $17.00 Question 9 1 pts The Volunteers for Senior Citizens, a non-profit organization in the Washington State, would like to purchase 300 units of your CoffeeX at a large discount. You are willing to sell the 300 units to them at no profit, the price which only recover the relevant costs. You have already sold 1,000 units of CoffeeX in domestic markets (your current customers) and sold another 200 units to the mountaineering camp. What would be the price that you would charge the Volunteers for Senior Citizens? $32.00 $29.00 $12.00 $11 Question 10 1 pts In the fourth quarter of your operations in the Washington State you realize that you need to recover your huge R&D cost in a very short time. Accordingly, you set the following price in order to bring more cash to your operations: $32.00 O $18.00 O $21.00 O $25.00 $35.00 Question 11 1 pts What is the name of the pricing strategy which you would be applying in the above situation (the situation which you will recover your huge cost of R&D in a short time before your product becomes obsolete)? Everyday value pricing Market skimming pricing Market Penetration Pricing Odd pricing O Customary Pricing Question 12 1 pts You're entering the very competitive market of California, and you are considering a pricing strategy which would fit in the competitive environment. The going price for comparable products in California is $32.00. Which of the following price scenarios would be desirable? O $23.00 $32.00 $29.00 O $26.00 O $12.00 Question 13 1 pts What would be your suggested Wholesaler price for CoffeeX at a price where you will be making $4.00 profit? The wholesaler would have a trade discount of 15% over his price to the retailer. $32.52 $36.97 @ $26.14 $34.12 $35.55 Question 14 1 pts What would be your suggested Retailer price if you were selling your CoffeeX to wholesalers while allowing them a 15% trade discount over the price that they in turn would sell to the retailer? Once you have arrived at the wholesaler's price, the retailer would have a trade discount (not the mark up) of 30% over the price that she would sell to the consumers. O $35.00 $48.74 $34.12 O $29.00 $14.62

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