Magpie Corporation Uses the Total Cost Method of Product Pricing

question 141

Multiple Choice

Magpie Corporation uses the total cost method of product pricing. Below is cost information for the production and sale of 60,000 units of its sole product. Magpie desires a profit equal to a 25% return on invested assets of $700,000.​ ​
-Contractors who sell to government agencies would be most likely to use which of the following cost methods in pricing their products?

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

---

Definitions:

Import

The act of bringing goods or services into a country from abroad for the purpose of trade.

Export

The sale of goods or services from one country to another.

Trucks

Large heavy-duty vehicles designed for transporting goods and materials over long distances.

Cars

Motor vehicles with four wheels designed primarily for passenger transportation on roads.