Question : 101. Mallard Corporation uses the product cost concept of product pricing. : 1246946

 

 

101. Mallard Corporation uses the product cost concept of product pricing. Below is cost information for the production and sale of 45,000 units of its sole product. Mallard desires a profit equal to a 12% rate of return on invested assets of $800,000. 

Fixed factory overhead cost

$82,000

Fixed selling and administrative costs

45,000

Variable direct materials cost per unit

5.50

Variable direct labor cost per unit

7.65

Variable factory overhead cost per unit

2.25

Variable selling and administrative cost per unit

.90

 

 

The markup percentage on product cost for the company’s product is: A. 23.4%B. 10.98%C. 26.1%D. 18%

 

102. Mallard Corporation uses the product cost concept of product pricing. Below is cost information for the production and sale of 45,000 units of its sole product. Mallard desires a profit equal to a 12% rate of return on invested assets of $800,000. 

Fixed factory overhead cost

$82,000

Fixed selling and administrative costs

45,000

Variable direct materials cost per unit

5.50

Variable direct labor cost per unit

7.65

Variable factory overhead cost per unit

2.25

Variable selling and administrative cost per unit

.90

 

 

The unit selling price for the company’s product is: A. $19.35B. $15.75C. $22.05D. $21.25

 

103. Dotterel Corporation uses the variable cost concept of product pricing. Below is cost information for the production and sale of 35,000 units of its sole product. Dotterel desires a profit equal to a 11.2% rate of return on invested assets of $350,000. 

Fixed factory overhead cost

$105,000

Fixed selling and administrative costs

35,000

Variable direct materials cost per unit

4.34

Variable direct labor cost per unit

5.18

Variable factory overhead cost per unit

.98

Variable selling and administrative cost per unit

.70

 

 

The dollar amount of desired profit from the production and sale of the company’s product is: A. $89,600B. $39,200C. $70,000D. $84,000

 

104. Dotterel Corporation uses the variable cost concept of product pricing. Below is cost information for the production and sale of 35,000 units of its sole product. Dotterel desires a profit equal to a 11.2% rate of return on invested assets of $350,000. 

Fixed factory overhead cost

$105,000

Fixed selling and administrative costs

35,000

Variable direct materials cost per unit

4.34

Variable direct labor cost per unit

5.18

Variable factory overhead cost per unit

.98

Variable selling and administrative cost per unit

.70

 

 

The variable cost per unit for the production and sale of the company’s product is: A. $14.00B. $12.60C. $  9.80D. $11.20

 

105. Dotterel Corporation uses the variable cost concept of product pricing. Below is cost information for the production and sale of 35,000 units of its sole product. Dotterel desires a profit equal to a 11.2% rate of return on invested assets of $350,000. 

Fixed factory overhead cost

$105,000

Fixed selling and administrative costs

35,000

Variable direct materials cost per unit

4.34

Variable direct labor cost per unit

5.18

Variable factory overhead cost per unit

.98

Variable selling and administrative cost per unit

.70

 

 

The markup percentage for the sale of the company’s product is: A. 14%B. 5.6%C. 45.71%D. 11.2%

 

106. Dotterel Corporation uses the variable cost concept of product pricing. Below is cost information for the production and sale of 35,000 units of its sole product. Dotterel desires a profit equal to a 11.2% rate of return on invested assets of $350,000. 

Fixed factory overhead cost

$105,000

Fixed selling and administrative costs

35,000

Variable direct materials cost per unit

4.34

Variable direct labor cost per unit

5.18

Variable factory overhead cost per unit

.98

Variable selling and administrative cost per unit

.70

 

 

The unit selling price for the company’s product is: A. $16.32B. $13.44C. $12.10D. $13.72

 

107. What pricing method may be used if there are several providers in the same market and there is sufficient demand for your product? A. Demand-based methodB. Total cost methodC. Cost-plus methodD. Competition-based method

 

108. What pricing method is used if all costs are considered and a fair mark-up is added to determine the selling price? A. Total cost methodB. Demand-based methodC. Variable cost methodD. Mark-up method

 

109. Using the variable cost concept determine the selling price for 30,000 units using the following data: Variable cost per unit $15.00, $150,000 desired profit, and total fixed costs $90,000. A. $20.00B. $21.67C. $18.00D. $23.00

 

110. Which equation better describes Target Costing? A. Selling Price – Desired Profit = Target CostsB. Selling Price – Target Costs = ProfitC. Target Variable Costs + Contribution Margin = Selling PriceD. Selling Price = Target Variable Costs + Target Fixed Costs + Profit