Question
Wheeler Company is a price-taker and uses a target-pricing approach. Refer to the following information: Production volume 600,000 units per year Market price $34 per
Wheeler Company is a price-taker and uses a target-pricing approach. Refer to the following information:
| Production volume | 600,000 | units per year |
| Market price | $34 | per unit |
| Desired operating income | 17% | of total assets |
| Total assets | $13,800,000 |
|
What is the desired profit for the year?
| a | $102,000 |
| b | $20,400,000 |
| c | $6,600,000 |
| d | $2,346,000 |
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Audit Guide Audit Sampling
Authors: AICPA
2nd Edition
195068833X, 978-1950688333
