Question : 36.              Bond Co. using the target cost approach a new : 1311800

 

 

36.              Bond Co. is using the target cost approach on a new product. Information gathered so far reveals:

Expected annual sales400,000 units

Desired profit per unit$0.35

Target cost$168,000

What is the target selling price per unit?

a.$0.42

b.$0.70

c.$0.35

d.$0.77

 

 

37.              Well Water Inc. wants to produce and sell a new flavored water. In order to penetrate the market, the product will have to sell at $2.00 per 12 oz. bottle. The following data has been collected:

Annual sales50,000 bottles

Projected selling and administrative costs$8,000

Desired profit$70,000

The target cost per bottle is

a.$0.44.

b.$0.60.

c.$0.16.

d.$0.40.

 

 

38.              Larry Cable Inc. plans to introduce a new product and is using the target cost approach. Projected sales revenue is $810,000 ($4.05 per unit) and target costs are $730,000. What is the desired profit per unit?

a.$0.40

b.$2.03

c.$3.65

d.None of the above

 

 

39.              Wasson Widget Company is contemplating the production and sale of a new widget. Projected sales are $300,000 (or 75,000 units) and desired profit is $36,000. What is the target cost per unit?

a.$4.00

b.$3.52

c.$4.48

d.$4.80

 

 

40.              Boomer Boombox Inc. wants to produce and sell a new lightweight radio. Desired profit per unit is $1.84. The expected unit sales price is $22 based on 10,000 units. What is the total target cost?

a.$201,600

b.$220,000

c.$18,400

d.$238,400

 

 

41.              In cost-plus pricing, the markup consists of

a.manufacturing costs.

b.desired ROI.

c.selling and administrative costs.

d.total cost and desired ROI.

 

 

42.              The desired ROI per unit is calculated by

a.multiplying the ROI times the investment and dividing by the estimated volume.

b.multiplying the unit selling price by the ROI.

c.dividing the total cost by the estimated volume and multiplying by the ROI.

d.dividing the ROI by the estimated volume and subtracting the result from the unit cost.

 

 

43.              Bellingham Suit Co. has received a shipment of suits that cost $200 each. If the company uses cost-plus pricing and applies a markup percentage of 60%, what is the sales price per suit?

a.$333

b.$320

c.$280

d.$500

 

 

44.              Custom Shoes Co. has gathered the following information concerning one model of shoe:

Variable manufacturing costs$40,000

Variable selling and administrative costs$20,000

Fixed manufacturing costs$160,000

Fixed selling and administrative costs$120,000

Investment$1,700,000

ROI30%

Planned production and sales5,000 pairs

What is the total cost per pair of shoes?

a.$40

b.$68

c.$168

d.$96

 

 

45.              Custom Shoes Co. has gathered the following information concerning one model of shoe:

Variable manufacturing costs$40,000

Variable selling and administrative costs$20,000

Fixed manufacturing costs$160,000

Fixed selling and administrative costs$120,000

Investment$1,700,000

ROI30%

Planned production and sales5,000 pairs

What is the desired ROI per pair of shoes?

a.$68

b.$168

c.$102

d.$170