Arnold Company Produces Handheld Calculators, and Their Manufacturing Cost Is

question 106

Multiple Choice

Arnold Company produces handheld calculators, and their manufacturing cost is currently $5.80 per unit. The company also has non-manufacturing costs of $1.20 per unit. Arnold employs target pricing strategy, and the current market price is $8.00 per unit. If Arnold wishes to price their product at a 25% markup over full-product cost, what must they do?

• A) Price the product at $8.75 per unit.
• B) Reduce full-product cost by $0.20.
• C) Reduce full-product cost by $0.60.
• D) Reduce the non-manufacturing cost by 25%.

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Definitions:

Telecommuting

The practice of working from a remote location, outside of the traditional office environment, often facilitated by digital communication technologies.

Social Isolation

A state in which an individual lacks a sense of belonging socially, lacks engagement with others, and has a minimal number of social contacts, often resulting in feelings of loneliness.

Teamwork

The collaborative effort of a group to achieve a common goal or to complete a task in the most effective and efficient way.

Scientific Management

A theory of management focusing on improving economic efficiency, especially labor productivity, through the application of scientific methods to jobs and workers.