Drill Quest,Inc $Q = 1,200 - 0.05 P$ Using Cost-Plus Pricing,Drill Quest Prices Its Bits at $______________ Per

question 37

Multiple Choice

Drill Quest,Inc.manufactures drill bits for the oil industry.Drill Quest uses cost-plus pricing to set the price of its bits.Currently Drill Quest applies a 50 percent markup on average total cost.Average variable cost of producing bits is constant and equal to $6,000 per bit.Total fixed cost at Drill Quest is $550,000.DrillQuest currently produces 690 bits.Statistical estimation of demand for Drill Quest brand bits produces the following linear demand equation (where Q is the number of bits demanded and P is the price of bits) : $Q = 1,200 - 0.05 P$ Using cost-plus pricing,Drill Quest prices its bits at $______________ per bit.

• A)$10,195
• B)$12,175
• C)$797
• D)$6,000
• E)$6,797

Recognize the capabilities of connecting shapes and managing slide components.

Understand the functionality and application of sections in organizing presentations.

Comprehend the process of changing text fonts and bullet styles globally across slides.

Learn about accessibility features, such as adding alt text to objects in presentations.

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Definitions:

IFRS

International Financial Reporting Standards, a set of accounting standards developed by the International Accounting Standards Board (IASB) that is globally accepted for financial reporting.

Noncash Consideration

Payment made in a form other than cash, such as property, goods, or services, during transactions.

Dividends Payable

Refers to the amount of dividends that a company has declared to pay out to its shareholders but has not yet distributed.

Dividends Declared

The portion of a company's earnings that is approved by the board of directors to be distributed to shareholders.