Kirk Comanufactures Mobile Cellular Equipment and Develops a Price for the the Product

question 76

Essay

Kirk Co.manufactures mobile cellular equipment and develops a price for the product by using a variable cost concept.Kirk incurs variable costs of $1,900,000 in the production of 100,000 units.Fixed costs total $50,000.The company employs $4,725,000 of assets and wishes to earn a profit equal to a 10% rate of return on assets.
(a)Compute a markup percentage based on the variable costs concept.
(b)Determine a selling price.

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Definitions:

Niches

Specific, targeted segments of a market where businesses can focus their products or services to meet specific consumer needs.

Consumer Income

The total earnings of a consumer, influencing their purchasing power and consumption habits.

High-Quality Products

Goods that exceed the standard expectations in performance, durability, and reliability.

Eating Out

Refers to the activity of dining in restaurants or other food establishments rather than at home.