Cheshire Cat Company Sells One of Its Products for $100

question 120

Multiple Choice

Cheshire Cat Company sells one of its products for $100 each. Sales volume averages 750 units per year. Recently, its main competitor reduced the price of its product to $80. Cheshire Cat Company expects sales to drop dramatically unless it matches the competitor's price. In addition, the current profit per unit must be maintained. Information about the product (for production of 750) is as follows: $\begin{array}{lrrr}&\mathrm{SQ} &\mathrm{AQ}& \text { Actual Cost }\\\text { Materials (pounds) } & 2,000 & 2,500 & \$ 50,000 \\\text { Labor (hours) } & 450 & 500 & 25,000 \\\text { Setups (hours) } & 0 & 600 & 7,500 \\\text { Material handling (moves) } & 0 & 300 & 3,750 \\\text { Warranties (number repaired) } & 0 & 200 & 15,000\end{array}$ The non-value-added cost per unit is

• A)$49.67.
• B)$48.33.
• C)$48.67.
• D)$51.67.

---

Definitions:

Sense Of Shame

A complex emotion that combines feelings of failure, dishonor, and unworthiness, often triggered by perceived personal shortcomings or societal judgment.

Prove Himself

The act of demonstrating one's abilities or worthiness through actions or achievements.

Protective Optimism

The belief that positive outcomes are more likely than negative ones, often leading individuals to take preventive actions.

Emotional Regulation

The process through which individuals influence their own emotions, how they experience and express them.