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

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Definitions:

Confront

To face or challenge something directly, often used in therapeutic contexts to describe addressing difficult or painful emotions and realities.

"Shoulds"

Cognitive distortions characterized by beliefs about how one or others ought to behave, which can often lead to feelings of guilt or shame.

Difficult Feelings

Emotional experiences that are challenging to face or manage, such as sadness, anger, guilt, or anxiety.

Emergent Strategy

A strategy that develops over time in an organization in the absence of specific intentions, often in response to unexpected opportunities or challenges.