Ganges Company Makes Bulk Burlap by the Ton

question 42

Multiple Choice

Ganges Company makes bulk burlap by the ton. Currently, their manufacturing cost is $215 per unit, and their non-manufacturing cost is $40 per unit. The going market price of the product is $300. Ganges uses the target price and target cost methodology. If they desire to make a profit of 20% on the price, what must they do?

• A)Increase the advertising costs by $15 per unit.
• B)Reduce the price they charge by $15 per unit.
• C)Reduce the full-product cost by $60 per unit.
• D)Reduce the full-product cost by $15 per unit.

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Definitions:

Blended Family

A family composed of a couple and their children from this and all previous relationships, emphasizing the merging of two separate families into one new unit.

HIV/AIDS

A virus (HIV) that attacks the immune system and can lead to the disease AIDS, a condition where the body cannot fight off infections effectively.

Sexually Restrictive

Societies or policies that place strict rules and limitations on sexual behavior and expression.

Nuclear Family

A family unit consisting of two parents and their children, living together as a single household.