Morice Industries Inc

question 51

Multiple Choice

Morice Industries Inc. 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:

Stock Purchase Plans

Programs offered by companies allowing employees to purchase company stock often at a discount, as part of their benefits package.

Gainsharing

A performance-based compensation strategy where employees receive financial rewards based on improvements in the company's productivity or performance metrics.

Group Incentive

A reward or compensation given to a team or group based on their collective performance or achievements.