Refer to the Scenario Below to Answer the Following Questions

question 77

Multiple Choice

Refer to the scenario below to answer the following questions.
Alden Manufacturing produces small kitchen appliances-blenders,hand mixers,and electric skillets-under the brand name First Generation.Alden attempts to target newlyweds and first- time home buyers with this brand.
In considering that most young households have limited financial resources,Alden has attempted to engage in target costing."In doing this," Milt Alden stated,"we have better control over keeping price right in line with customers."
Alden manufactures a three- speed blender,its top seller,and a five- speed blender.The hand mixers are manufactured in two styles-a small handheld mixer with two rotating beaters and a similar style that comes with an optional stand and attached mixing bowl.Alden's temperature- controlled skillets are manufactured in one style with three color options.
"Our product offerings are narrower," Milt Alden added,"but our line workers know each product like the back of their hands.This allows us to produce superior products while holding our prices low."
-Milt Alden uses a target costing strategy.Which of the following is he most likely to do in executing this strategy?

• A)start by determining the costs of a new product
• B)start with customer- value considerations
• C)base his price on competitors' prices
• D)use everyday low pricing
• E)use a break- even chart to determine pricing

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Definitions:

Proprietorship

A business owned and operated by a single individual, who is entitled to all profits and responsible for all debts.

Easy And Cheap

Descriptive terms indicating something is not difficult to do or obtain and does not require a lot of resources, specifically money, to acquire.

Service Business

A type of business that provides intangible products or services to customers, rather than producing tangible goods.

Health Club

A facility that offers health and fitness services, including exercise equipment, fitness classes, and sometimes additional amenities like pools and spas.