WHAT PRICE WILL THE COMPANY CHARGE IF THE FIRM USES COST-PLUS PRICING BASED ON TOTAL VARIABLE COST AND A MARKUP PERCENTAGE OF 150%?

11 May WHAT PRICE WILL THE COMPANY CHARGE IF THE FIRM USES COST-PLUS PRICING BASED ON TOTAL VARIABLE COST AND A MARKUP PERCENTAGE OF 150%?

Posted at 10:49h in 2General studies by solutions

Which
of the following is a common type of value engineering in which the performance
and cost of each major function or feature of the product is examined?

A. Cost
analysis.
B. Variable
design engineering.
C. Cost-based
value engineering.
D. Functional
analysis.
E. Design
analysis.

62.
A
type of strategic pricing based on analytical methods is used to:
A. Optimally
determine the best price.
B. Utilize
knowledge of the sales life cycle in setting price.
C. More
accurately determine life cycle costs as a basis for setting price.
D. Employ
improved design methods that reduce cost and improve price.

Johnson
Marine has the following costs and expected sales for the coming year. Johnson
is considering a number of different methods to determine the price of its
product.
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63.
If
Johnson determines price using a 40% markup of full manufacturing cost, the
price is:
A. $262.50

B. $306.00

C. $375.00

D. $364.29

E. $330.00

64.
If
Johnson determines price so as to receive a desired return on assets of 15%,
the price is:
A. $262.50

B. $306.00

C. $375.00

D. $364.29

E. $330.00

65.
If
Johnson determines price using a desired gross margin percentage of 50%, the
price is:
A. $262.50

B. $306.00

C. $375.00

D. $364.29

E. $330.00

66.
If
Johnson determines price using a desired return on life cycle costs of 30%, the
price is:
A. $262.50

B. $306.00

C. $375.00

D. $364.29

E. $330.00

67.
If
Johnson determines price using a 20% markup of life cycle cost, the price is:
A. $262.50

B. $306.00

C. $375.00

D. $364.29

E. $330.00

68. Caldwell
Company desires to enter a market with a new product. As part of this process
the following tasks will be performed:

1.
Determine
a desired profit margin.
2. Use
Kaizen costing.
3. Design
and engineer the product.
4. Determine
the product’s cost.
5. Determine
the suggested selling price.

Which task would Caldwell Company
perform first if it plans to use target costing?
A. Determine
a desired profit margin.

B. Use
Kaizen costing.
C. Design
and engineer the product.
D. Determine
the product’s cost.
E. Determine
the suggested selling price.

69.
The
five tasks that follow take place with the concept known as target costing:

1.
Use
value engineering to identify ways to reduce product cost.
2. Determine
the market price.

3. Determine
the desired profit.
4. Use
kaizen costing and operational control to reduce costs.
5. Calculate
the target cost at market price less desired profit.

Which of the following choices
depicts the correct sequence of these tasks?
A. 1,
2, 3, 4, 5

B. 2,
3, 5, 1, 4
C. 3,
2, 5, 4, 1
D. 3,
2, 5, 1, 4
E. 5,
3, 2, 4, 1

70. David
Corporation manufactures a single product that has a cost of $250. The company
uses a 60% markup on manufacturing cost to arrive at a selling price of $400,
which results in a price that is higher than that of the leading competitors.
If David adopts the approach known as target costing, the company will first:
A. Reduce
the 60% markup rate.
B. Re-engineer
the product.
C. Obtain
a better understanding of the competitors’ prices.
D. Reduce
the $250 cost.
E. Change
to a markup on life cycle cost rather than manufacturing cost.

71.
Baldwin produces bicycles in a highly
competitive market. During the past year, the company has added a 20% markup on
the $300 manufacturing cost for one of its most popular models. A new
competitor recently entered the market with a competitive model that is priced
at $320, seriously eroding Baldwin’s market share. Management now desires to
use a target-costing approach to remain competitive and is willing to accept a
20% return on sales.

If
target costing is used, which of the following choices correctly denotes (1)
Baldwin’s selling price and
(2) Baldwin’s target cost?

A.
Option
A
B. Option
B

C. Option
C
D. Option
D
E. Option
E
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The
Gargus Company, which manufactures projection equipment, is ready to introduce
a new line of portable projectors. The following data are available for a
proposed model:
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72. What
price will the company charge if the firm uses cost-plus pricing based on
variable manufacturing cost and a markup percentage of 200%?

A. $810.