Question :
33. Peacock Company sells its product for $100 per unit. The : 1208166
33. Peacock Company sells its product for $100 per unit. The company’s accountant provided the following cost information:
What is Peacock Company’s contribution margin ratio?
A. 60%
B. 70%
C. 30%
D. 40%
34. Zero, Inc. produces a product that has a variable cost of $7.00 per unit. The company’s fixed costs are $40,000. The product sells for $12.00 a unit and the company desires to earn a $20,000 profit. What is the volume of sales in units required to achieve the target profit?
A. 2,000
B. 8,000
C. 8,500
D. 12,000
35. Parker Company has not reported a profit in five years. This year the company would like to narrow its loss to $15,000. Assuming its selling price is $36.50 per unit and its variable costs per unit are $24, how many units must be sold to achieve its target given that total fixed costs are $60,000?
A. 3,600
B. 4,800
C. 4,000
D. 3,200
36. Kratzen Company sells a product at $50 per unit that has unit variable costs of $30. The company’s break-even sales volume is $150,000. How much profit will the company make if it sells 4,000 units?
A. $210,000
B. $150,000
C. $20,000
D. $60,000
37. The records of Kennett Company show a contribution margin ratio of 35%. The company desires to earn a profit of $35,000 and has fixed costs of $70,000. What sales revenue would have to be generated in order to earn the desired profit?
A. $110,000
B. $200,000
C. $300,000
D. $100,000
38. For 2012, Harper Company sold 80,000 units at a selling price of $20 per unit. Variable cost per unit was $12, and Harper’s net income for the year was $40,000. What was the amount of Harper’s fixed costs?
A. $640,000
B. $800,000
C. $1,560,000
D. $600,000
39. Newman Company currently produces and sells 4,000 units of a product that has a contribution margin of $6 per unit. The company sells the product for a sales price of $20 per unit. Fixed costs are $18,000. The company is considering investing in new technology that would decrease the variable cost per unit to $8 per unit and double total fixed costs. The company expects the new technology to increase production and sales to 9,000 units of product. What sales price would have to be charged to earn a $90,000 target profit assuming the investment in technology is made?
A. $22
B. $20
C. $18
D. $8
40. Harris Company produces a product whose cost is $10. Assuming the company uses a cost-plus pricing system, what profit would be earned on a selling price set to earn a profit margin of 20% of cost?
A. $2.00
B. $10.80
C. $10.00
D. $12.00
41. Chan Company sets the selling price for its product by adding a markup to the product’s variable manufacturing costs. This approach to pricing is referred to as:
A. target pricing
B. cost-plus pricing
C. target costing
D. contribution margin pricing
42. The pricing strategy that begins with the determination of a price at which a product will sell and then focuses on the development of that product with a cost structure that will satisfy market demand is known as
A. Cost plus pricing
B. Prestige pricing
C. Developmental pricing
D. Target pricing
