Morice Industries Incorporated Has Developed a New Injection Mold, Model

question 254

Multiple Choice

Morice Industries Incorporated has developed a new injection mold, model IA-05, that is designed to offer superior performance to a comparable injection mold sold by Morice's main competitor. The competing injection mold sells for $54,000 and needs to be replaced after 1,000 hours of use. It also requires $7,000 of preventive maintenance during its useful life. Model IA-05's performance capabilities are similar to the competing product with two important exceptions-it needs to be replaced only after 2,000 hours of use and it requires $8,000 of preventive maintenance during its useful life.From a value-based pricing standpoint what is the reference value that Morice should consider when pricing model IA-05?

• A) $54,000
• B) $68,000
• C) $108,000
• D) $61,000

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Definitions:

Rough Endoplasmic Reticulum

A network of membrane-bound tubules and sacs studded with ribosomes, involved in protein synthesis and folding.

Cell Theory

A fundamental principle in biology stating that all living things are composed of cells, cells are the basic units of life, and all cells come from pre-existing cells.

Physiological Functions

The biological processes and activities carried out by the organs and systems of an organism to maintain life.

Preexisting Cells

The principle that cells are formed from the division of existing cells, as stated in the cell theory.