5 target pricing is based on a engineered cost b

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5.Target pricing is based onA) engineered cost.B) variable manufacturing and nonmanufacturing costs.C) full product cost.D) what customers are willing to pay.E) full manufacturing cost.Answer:D6. Pershing Company budgeted the following costs for the production of its one and only
product, blades, for the next fiscal year:
Factory overhead:Variable140,000Fixed107,500Selling and administrative:Variable60,000Fixed80,000Total costs$705,000Pershing has a target profit of $150,000.What is the target profit percentage as a percentage of total manufacturing costs?D
If total invested capital is $1,000,000, what is the company's target rate of return oninvestment?A7. Acorn Products currently sells small boats for $360. It has costs currently assigned to it
of $280. A competitor is bringing a new small boat to market that will sell for $300.Management believes it must lower the price to $300 to compete in the market for smallboats. Marketing believes that the new price will cause sales to increase by 10 percent,even with a new competitor in the market. Acorn's sales are currently 100,000 per year.What is the target cost if target profit is 25 percent of the competitor's selling price?A) $75B) $90C) $225D) $270E) $280Answer:Explanation:C) $300 - $300(0.25) = $225C
8. Sheltar's TV currently sells small televisions for $180. It has costs of $140. A competitoris bringing a new small television to market that will sell for $150. Management believes itmust lower the price to $150 to compete in the market for small televisions. Marketingbelieves that the new price will cause sales to increase by 10%, even with a new competitorin the market. Sheltar's sales are currently 100,000 televisions per year.What is the target cost if target operating income is 25% of sales?E
Explanation:E) $150 - ($150 × 0.25) = $112.50 31)What is the change in operating income if marketing is correct and only the sales price ischanged?D
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