Question : 101. Dotterel Corporation uses the variable cost concept of product pricing. : 1251722

 

 

101. 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 costs35,000

Variable direct materials cost per unit4.34

Variable direct labor cost per unit5.18

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%

 

102. 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 costs35,000

Variable direct materials cost per unit4.34

Variable direct labor cost per unit5.18

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

103. What pricing concept considers the price that other providers charge for the same product? A. demand-based conceptB. total cost conceptC. cost-plus conceptD. competition-based concept

104. What pricing concept is used if all costs are considered and a fair markup is added to determine the selling price? A. total cost concept B. demand-based conceptC. variable cost concept D. fixed cost concept

105. 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

106. The Swan 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 markup percentage on product cost. A. 80%B. 46.5%C. 70%D. 110%

107. The Swan 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 markup percentage on variable cost. A. 100%B. 110%C. 80%D. 46.5%

108. The Swan 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 markup percentage on total cost. A. 100%B. 110%C. 80%D. 46.5%

109. 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%.

110. Paint Company manufactures Paint X and Paint Y and can sell all it can make of either. Based on the following data, which statement is true? 

XY

Sales Price$32$40

Variable Cost2224

Hours needed to process58

A. X is more profitable than Y.B. Y is more profitable than X.C. Neither X nor Y is profitable.D. X and Y are equally profitable.

 

 

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