Pueblo Products Is a Price-Taker and Uses Target Pricing

question 118

Multiple Choice

Pueblo Products is a price-taker and uses target pricing. Pueblo has just done an analysis of their revenues, costs and desired profits, and has calculated its target full cost. Please refer to the following information: Actual costs are currently higher than target full cost. Assuming that variable costs are dependent on commodity prices and CANNOT be reduced, how much is the target fixed cost?

• A)$160,000
• B)$175,000
• C)$150,000
• D)$140,000

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Definitions:

Special Journals

Customized accounting journals used for recording and categorizing specific types of financial transactions.

General Journal

A comprehensive listing of a company's financial transactions, used as the primary record for posting to individual accounts.

Adjusting Entry

An accounting entry made to update the accounts and ensure accurate financial reporting at the end of an accounting period.

General Journal

The general journal is an initial record where all transactions are first entered in accounting, using a double-entry system before posting to individual accounts.