Use the Following Information for the Next 3 Questions

question 29

Multiple Choice

Use the following information for the next 3 questions.
PIR Corporation has 2 support departments and 2 operating departments. Number of employees is used as an allocation base for personnel support costs, and square feet are used for janitorial support costs. A breakdown of their costs, along with other operating information, is shown below for a recent accounting period:
-If PIR uses single-rate allocation and the direct method, the total cost (including support department costs) for Product Assembly will be

• A) $14,000
• B) $28,000
• C) $30,400
• D) None of the above

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Definitions:

Experience-curve Pricing

A pricing strategy based on the concept that costs decline and efficiency improves over time with accumulated production experience.

Experience-curve Pricing

A pricing strategy based on the idea that costs per unit decrease with increasing scale of production due to gained efficiencies and experience.

Cost-plus-percentage-of-cost Pricing

A pricing strategy where the selling price is determined by adding a specific percentage of profit margin to the total cost of the product or service.

Target Profit Pricing

is a pricing strategy where the price is set based on a desired profit margin added to the cost of the product.