View the step-by-step solution to:


Question 1 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 $1,000,000 159,500 $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 Save Question 2 (1 point) Question 2 Unsaved The Falling Snow Company is considering production of a lighted world globe that the company would price at a markup of 0.25 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 0.25 markup? Your Answer: Question 2 options: Answer Save Question 3 (1 point) Question 3 Unsaved A company believes it can sell 5,400,000 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 Save Question 4 (1 point) 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 $15,000 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 Save Question 5 (1 point) 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 pricing demand pricing cost-plus pricing cost plus demand pricing Save Question 6 (1 point) 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 3,200 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 company’s first international order. On the other hand, the company in China is willing to pay only $140 per unit. What will be the effect on profit of accepting the order? Your Answer: Question 6 options: Answer Save Question 7 (1 point) Question 7 Unsaved Another name for menu-based pricing is: Question 7 options: Cost-plus pricing Customer profitability pricing Profit maximizing pricing Activity-based pricing Save Question 8 (1 point) 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: Answer Save Save All Responses

Sign up to view the entire interaction

Top Answer

View the full answer

1 Units sold
Profit =
2 Fixed cost
Variable cost
Units sold
Mark up
Total cost =
Full cost of 1200 units with.25 mark up pricing =
Full cost per unit =
3 Units
Selling price
Fixed cost

Sign up to view the full answer

Why Join Course Hero?

Course Hero has all the homework and study help you need to succeed! We’ve got course-specific notes, study guides, and practice tests along with expert tutors.


Educational Resources
  • -

    Study Documents

    Find the best study resources around, tagged to your specific courses. Share your own to gain free Course Hero access.

    Browse Documents
  • -

    Question & Answers

    Get one-on-one homework help from our expert tutors—available online 24/7. Ask your own questions or browse existing Q&A threads. Satisfaction guaranteed!

    Ask a Question
Ask a homework question - tutors are online