Bouchard Company Manufactures a Product That Currently Has a Full

question 78

Multiple Choice

Bouchard Company manufactures a product that currently has a full cost of $700. Its target operating income per unit is $80 and management's budgets assume that same target operating income per unit for the foreseeable future. To stay competitive, Bouchard management believes it must cut its price by 25%. What will be its new target cost?

• A) $700
• B) $505.00
• C) $585.00
• D) $80

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Definitions:

PE Ratio

Price-to-Earnings Ratio is a measure that compares a company's current share price to its per-share earnings.

Stock Price

The cost of purchasing one share of a company's stock.

Investment Activity

Transactions involving the purchase and sale of long-term assets and other investments not generally considered cash equivalents or traded in active markets.