A Custom Tailor Wishes to Use Target Profit Pricing to Establish

question 270

Multiple Choice

A custom tailor wishes to use target profit pricing to establish a price for a custom-designed business suit. Assume variable cost is $200 per suit, fixed cost is $44,000, and the target profit is $50,000 based on a volume of 50 suits. What price should be charged for a typical custom suit?

• A) $520
• B) $1,040
• C) $1,880
• D) $2,080
• E) $10,000

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Definitions:

Consistency

Refers to the uniformity or coherence in actions, values, methods, measures, principles, expectations, and outcomes over time.

Impression Management

The process by which individuals attempt to control the perceptions and opinions others have of them, often through self-presentation techniques.

Tactics

Strategies or actions carefully planned to achieve a specific end.

Talk Negatively

Engaging in conversation that focuses on criticism, pessimism, or highlighting flaws without constructive purpose.