Question : 101. Elfrink Corporation uses the variable cost concept of product pricing. : 1233917

101. Elfrink 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. Elfrink 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

102. Elfrink 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. Elfrink 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%

103. Elfrink 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. Elfrink 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

104. 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

105. 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

106. Using the variable cost concept determine the selling price for 30,000 units using the following data: Variable cost per unit $13.00, $120,000 desired profit, and total fixed costs $80,000. A. $20.00B. $21.67C. $17.00D. $19.67

107. 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

108. The Koko Company produces their product at a total cost of $43 per unit. Of this amount $8 per unit is selling and administrative costs. The total variable cost is $30 per unit The desired profit is $20 per unit. Determine the mark up percentage on product cost. A. 80%B. 46%C. 70%D. 65%

109. The Koko Company produces their product at a total cost of $43 per unit. Of this amount $8 per unit is selling and administrative costs. The total variable cost is $30 per unit The desired profit is $20 per unit. Determine the mark up percentage on variable cost. A. 100%B. 110%C. 80%D. 57%

110. Target costing is arrived at by A. taking the selling price and subtracting desired profit.B. taking the selling price and adding desired profit.C. taking the selling price and subtracting the budget standard cost.D. taking the budget standard cost and reducing it by 10%.