Gotham Products Is a Price-Taker and Uses Target Pricing

question 151

Multiple Choice

Gotham Products is a price-taker and uses target pricing. Gotham has just done an analysis of their revenues, costs and desired profits, and has calculated its target full product cost. Refer to the following information: Actual costs are currently higher than target full product cost. Assuming that fixed costs cannot be reduced, how much is the target variable cost per unit?

• A)$1.20
• B)$1.47
• C)$1.33
• D)$3.33

---

Definitions:

Memos

Short written communications typically used within an organization to inform or instruct employees.

Internal Communication

The transmission of information and messages within an organization among its members or employees.

Text Messaging

The act of sending short messages electronically, typically from one mobile phone to another.

Abbreviations

Shortened forms of words or phrases, used to save space or avoid repetition.