The Owner of a Store That Sells Custom Kitchen Cabinets

question 281

Multiple Choice

The owner of a store that sells custom kitchen cabinets wishes to use a target return-on-sales pricing approach to establish a price for a typical section of cabinets. Assume that variable costs total $200 per unit, fixed cost is $44,000, and the storeowner desires a target profit of 20 percent return on sales at an annual volume of 400 cabinets. What price should be charged for a typical cabinet section?

• A) $263.50
• B) $311.00
• C) $387.50
• D) $445.50
• E) $775.00

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Definitions:

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Standard Deviations

A measure of the amount of variation or dispersion of a set of values, indicating how spread out the data points are from the mean.

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