Question 1 (1 point) .umuc.edu/d2l/img/0/QuestionCollection.Main.infQuestionUnsaved.gif?v=10.3.0.791-144″ alt=”Question 1 unsaved” title=”Question 1 unsaved”>Tory Company sells a single product. Troy estimates demand and costs at various activity levels as follows:
Units Sold
Price
Total Variable Costs
Fixed Costs
120,000
$48
$3,000,000
$1,000,000
146,500
$45
$3,510,000
$1,000,000
160,000
$40
$4,000,000
$1,000,000
180,000
$35
$4,500,000
$1,000,000
200,000
$30
$5,000,000
$1,000,000
How much profit will Troy have if a price of $45 is charged?Your Answer:Question 1 options:Answer
Question 2 (1 point) .umuc.edu/d2l/img/0/QuestionCollection.Main.infQuestionUnsaved.gif?v=10.3.0.791-144″ alt=”Question 2 unsaved” title=”Question 2 unsaved”>The
Falling Snow Company is considering production of a lighted world globe
that the company would price at a markup of 0.30 above full cost.
Management estimates that the variable cost of the globe will be $64 per
unit and fixed costs per year will be $240,000.
Assuming sales of 1,200 units, what is the full selling price of a globe with a 0.30 markup?Your Answer:Question 2 options:Answer
Question 3 (1 point) .umuc.edu/d2l/img/0/QuestionCollection.Main.infQuestionUnsaved.gif?v=10.3.0.791-144″ alt=”Question 3 unsaved” title=”Question 3 unsaved”>A
company believes it can sell 5,600,000 of its proposed new optical
mouse at a price of $10.50 each. There will be $8,000,000 in fixed costs
associated with the mouse. If the company desires to make a profit
$2,000,000 on the mouse, what is the target variable cost per mouse?Your Answer:Question 3 options:Answer
Question 4 (1 point) .umuc.edu/d2l/img/0/QuestionCollection.Main.infQuestionUnsaved.gif?v=10.3.0.791-144″ alt=”Question 4 unsaved” title=”Question 4 unsaved”>
Wizard Corporation has analyzed their customer and order handling data for the past year and has determined the following costs:
Order processing cost per order
$7
Additional costs if order must be expedited (rushed)
$9.50
Customer technical support calls (per call)
$12
Relationship management costs (per customer per year)
$1200
In addition to these costs, product costs amount to 75% of Sales.
In the prior year, Wizard had the following experience with one of its customers, Chester Company:
Sales
$15,500
Number of orders
160
Percent of orders marked rush
70%
Calls to technical support
80
Required:
Calculate the profitability of the Chester Company account.
Your Answer:Question 4 options:Answer
Question 5 (1 point) .umuc.edu/d2l/img/0/QuestionCollection.Main.infQuestionUnsaved.gif?v=10.3.0.791-144″ alt=”Question 5 unsaved” title=”Question 5 unsaved”>When a firm adds a predetermined percentage to the cost of its product for pricing purposes, it is called:Question 5 options:incremental pricingdemand pricingcost-plus pricingcost plus demand pricing
Question 6 (1 point) .umuc.edu/d2l/img/0/QuestionCollection.Main.infQuestionUnsaved.gif?v=10.3.0.791-144″ alt=”Question 6 unsaved” title=”Question 6 unsaved”>
PowerDrive, Inc. produces a hard
disk drive that sells for $175 per unit. The cost of producing 25,000
drives in the prior year was:
Direct material
$625,000
Direct labor
375,000
Variable overhead
125,000
Fixed overhead
1,500,000
Total cost
$2,625,000
At the start of the current year, the
company received an order for 3,400 drives from a computer company in
China. Management of PowerDrive has mixed feelings about the order. On
the one hand they welcome the order because they currently have excess
capacity. Also, this is the companys first international order. On the
other hand, the company in China is willing to pay only $130 per unit.
What will be the effect on profit of accepting the order?
Your Answer:Question 6 options:Answer
Question 7 (1 point) .umuc.edu/d2l/img/0/QuestionCollection.Main.infQuestionUnsaved.gif?v=10.3.0.791-144″ alt=”Question 7 unsaved” title=”Question 7 unsaved”>Another name for menu-based pricing is:Question 7 options:Cost-plus pricingCustomer profitability pricingProfit maximizing pricingActivity-based pricing
Question 8 (1 point) .umuc.edu/d2l/img/0/QuestionCollection.Main.infQuestionUnsaved.gif?v=10.3.0.791-144″ alt=”Question 8 unsaved” title=”Question 8 unsaved”>A
company has $40 per unit in variable costs and $1,200,000 per year in
fixed costs. Demand is estimated to be 106,000 units annually. What is
the price if a markup of 40% on total cost is used to determine the
price?Your Answer:Question 8 options:Tory Company sells a single product. Troy estimates demand and costs at various activity levels as follows:How much profit will Troy have if a price of $45 is charged?The
Falling Snow Company is considering production of a lighted world globe
that the company would price at a markup of 0.30 above full cost.
Management estimates that the variable cost of the globe will be $64 per
unit and fixed costs per year will be $240,000.Assuming sales of 1,200 units, what is the full selling price of a globe with a 0.30 markup?A
company believes it can sell 5,600,000 of its proposed new optical
mouse at a price of $10.50 each. There will be $8,000,000 in fixed costs
associated with the mouse. If the company desires to make a profit
$2,000,000 on the mouse, what is the target variable cost per mouse?Wizard Corporation has analyzed their customer and order handling data for the past year and has determined the following costs:Order processing cost per orderAdditional costs if order must be expedited (rushed)Customer technical support calls (per call)Relationship management costs (per customer per year)In addition to these costs, product costs amount to 75% of Sales.In the prior year, Wizard had the following experience with one of its customers, Chester Company:SalesNumber of ordersPercent of orders marked rushCalls to technical supportRequired:Calculate the profitability of the Chester Company account.When a firm adds a predetermined percentage to the cost of its product for pricing purposes, it is called:incremental pricingdemand pricingcost-plus pricingcost plus demand pricingAnother name for menu-based pricing is:Cost-plus pricingCustomer profitability pricingProfit maximizing pricingActivity-based pricingA
company has $40 per unit in variable costs and $1,200,000 per year in
fixed costs. Demand is estimated to be 106,000 units annually. What is
the price if a markup of 40% on total cost is used to determine the
price?
