52.Maker Sun Chairs is trying to determine the optimal price to charge for its galvanized deck chairs. The company has total fixed costs of $120,000 and the deck chairs have a unit variable cost of $27.00 per unit. Maker Sun Chairs has determined that the following relationships exist between price and demand:
Unit PriceUnit Demand
$45 7,200
$44 7,800
$43 8,400
$42 8,800
What is the anticipated revenue at a price of $44?
A.$343,200
B.$132,600
C.$12,600
D.$387,200
53.Maker Sun Chairs is trying to determine the optimal price to charge for its galvanized deck chairs. The company has total fixed costs of $120,000 and the deck chairs have a unit variable cost of $27.00 per unit. Maker Sun Chairs has determined that the following relationships exist between price and demand:
Unit PriceUnit Demand
$45 7,200
$44 7,800
$43 8,400
$42 8,800
What is the anticipated profit at a price of $43?
A.$134,400
B.$14,400
C.$194,400
D.$361,200
54.Maker Sun Chairs is trying to determine the optimal price to charge for its galvanized deck chairs. The company has total fixed costs of $120,000 and the deck chairs have a unit variable cost of $27.00 per unit. Maker Sun Chairs has determined that the following relationships exist between price and demand:
Unit PriceUnit Demand
$45 7,200
$44 7,800
$43 8,400
$42 8,800
What is the anticipated profit at a price of $42?
A.$12,000
B.$132,000
C.$249,600
D.$369,600
55.Maker Sun Chairs is trying to determine the optimal price to charge for its galvanized deck chairs. The company has total fixed costs of $120,000 and the deck chairs have a unit variable cost of $27.00 per unit. Maker Sun Chairs has determined that the following relationships exist between price and demand:
Unit PriceUnit Demand
$45 7,200
$44 7,800
$43 8,400
$42 8,800
What price should Maker Sun Chairs charge in order to maximize its profit?
A.$45
B.$44
C.$43
D.$42
56.Tong Chin is the manager of an Asian restaurant. She is considering four price levels for an all-you-can-eat buffet. Her estimate of price and quantity demanded are:
Buffet Meal Price Meals Demanded
$17.00 3,200
$16.00 3,700
$15.00 4,000
$14.00 4,400
Monthly operating costs include $16,400 of fixed costs and average variable costs of $9.40 per meal. Which price will yield the largest monthly profit?
A.$17
B.$16
C.$15
D.$14
57.Ramsey Foods has analyzed its customer and order handling data for the past year and has determined the following costs:
Order processing cost per order $5.50
Additional costs if order must be expedited (Per order) $6.00
Customer technical support calls (Per call) $3.50
Relationship management costs (Per customer per year) $1,900
In addition to these costs, product costs amount to 75% of sales. In the prior year, Ramsey had the following experience with one of its customers, Turnkey Enterprises:
Sales $18,000
Number of orders 28
Percent of orders marked rush 25%
Calls to technical support 14
Calculate the profit earned on the Turnkey Enterprises account.
A.$2,355
B.$4,153
C.$4,482
D.$2,229
58. Allstate HVAC recently developed a low-end electronic thermostat that it plans on selling via a cable channel marketing program. The cable program’s fee for selling the item is 20% of revenue. For this fee, the program will advertise the thermostat over six 10-minute segments in September. Allstate’s fixed costs of producing the thermostats are $110,000 per production run. The company plans to wait for all orders to come in, and then it will produce exactly the number of units ordered. Variable production costs are $25 per unit. In addition, it will cost approximately $5 per unit to ship the thermostats to customers. Production time will be less than three weeks. Henry Kristen, a product manager at Allstate, is charged with recommending a price for the thermostat. Based on his experience with similar items, focus group responses, and survey information, he has estimated the number of units that can be sold at various prices:
Unit PriceQuantity
$74.99 15,000
$63.99 20,000
$54.99 25,000
$49.99 35,000
At what price is profit maximized?
A.$74.99
B.$63.99
C.$54.99
D.$49.99
59. Allstate HVAC recently developed a low-end electronic thermostat that it plans on selling via a cable channel marketing program. The cable program’s fee for selling the item is 20% of revenue. For this fee, the program will advertise the thermostat over six 10-minute segments in September. Allstate’s fixed costs of producing the thermostats are $110,000 per production run. The company plans to wait for all orders to come in, and then it will produce exactly the number of units ordered. Variable production costs are $25 per unit. In addition, it will cost approximately $5 per unit to ship the thermostats to customers. Production time will be less than three weeks. Henry Kristen, a product manager at Allstate, is charged with recommending a price for the thermostat. Based on his experience with similar items, focus group responses, and survey information, he has estimated the number of units that can be sold at various prices:
Unit PriceQuantity
$90 5,000
$77 8,000
$65 11,000
$62 13,000
At which price should the company sell it products?
A.$90
B.$77
C.$65
D.$62
60.Vanana Tees sells its cool-zone t-shirts for $24 each. Unit product costs are as follows:
Direct materials $4.50
Direct labor 1.80
Manufacturing overhead 3.50
Total $9.80
A special order to purchase 1,200 shirts was recently received. There is enough capacity to fill the order. Filling this order will not disrupt current operations. Vanana expects to incur an additional $1.10 per unit for additional labor costs due to a slight modification the buyer wants made to the shirts. The manufacturing overhead costs consist of 30% allocated fixed costs. In negotiating a price, how much is Vanana Tees’ minimum acceptable selling price per t-shirt?
A.$6.30
B.$8.75
C.$9.85
D.$7.35
61.Which of the following must be true for a company to accept a special order?
A.Variable costs must be less than the contribution margin.
B.Incremental revenues must be greater than incremental costs.
C.Opportunity costs must be greater than total revenue.
D.Total fixed costs must stay constant.
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