Use This Information for Magpie Corporation to Answer the Questions

question 58

Multiple Choice

Use this information for Magpie Corporation to answer the questions that follow.
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Magpie Corporation uses the total cost concept of product pricing. Below is the cost information for the production and sale of 60,000 units of its sole product. Magpie desires a profit equal to a 25% rate of return on invested assets of $700,000.
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$$\begin{array} { l r } \text { Fixed factory overhead cost } & \$ 38,700 \\\text { Fixed selling and administrative costs } & 7,500 \\\text { Variable direct materials cost per unit } & 4.60 \\\text { Variable direct labor cost per unit } & 1.88 \\\text { Variable factory overhead cost per unit } & 1.13 \\\text { Variable selling and administrative cost per unit } & 4.50\end{array}$$
-Contractors who sell to government agencies would be most likely to use which of the following cost concepts in pricing their products?

• A) variable cost concept
• B) product cost concept
• C) total cost concept
• D) fixed cost concept

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Definitions:

Self-actualization

The realization or fulfillment of one's talents and potentialities, considered as a drive or need present in everyone.

Ideal Self

Ideal Self represents an individual's conception of how they would like to be, embodying their goals, aspirations, and values.

Real Self

The true essence of a person, including their most genuine thoughts, feelings, and desires, as opposed to roles or identities taken on for others.

Reciprocal Determinism

A concept in social cognitive theory that suggests a person's behavior is both influenced by and influences their personal factors and environment.