Perry Products Is Thinking of Expanding Its Product Line The Cost of the New Product Is $95 Per Unit

question 18

Multiple Choice

Perry Products is thinking of expanding its product line.The company's current income statement is as follows: $\begin{array}{lrr}\text { Revenues } & & \$ 600,000 \\\text { Cost of goods sold: } && \\\text { Direct materials } & \$ 250,000 \\ \text { Direct labour } & 100,000 \\\text { Overhead } & \underline{80,000} & \underline{430,000}\\\text { Gross profit }& & 170,000 \\\text { Gross profit } & & \underline{ 70,000 }\\\text { Selling and administrative } & & \underline{ \$ 100,000}\end{array}$ The cost of the new product is $95 per unit made up of $50 of direct materials,$35 of direct labour and $10 of overhead per unit.What is the bid price assuming Perry utilizes a markup on direct materials?

• A)$19.77
• B)$70
• C)$119
• D)$133

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Definitions:

Extended Fishbein Model

A model that extends the original Fishbein's theory by considering attitude toward the behavior, subjective norms, and perceived behavioral control as predictors of intentions and behaviors.

Social Pressure

The influence exerted by the social environment on individuals, compelling them to change their behaviors, values, or beliefs to conform to societal norms.

Individual Preferences

The personal likes or dislikes of an individual, influencing their choices and behaviors.

Theory of Reasoned Action

A theory that predicts an individual's intention to engage in a behavior at a specific time and place, based on the attitude toward the behavior and subjective norms.