Rica Company Is a Price-Taker and Uses a Target-Pricing Approach

question 8

Multiple Choice

Rica Company is a price-taker and uses a target-pricing approach. Refer to the following information: $$\begin{array} { | l | r | l | } \hline\text { Production volume } & 600,000 & \text { units per year } \\\hline \text { Market price } & \$ 30 & \text { per unit } \\\hline \text { Desired operating income } & 15 \% & \text { of total assets } \\\hline \text { Total assets } & \$ 13,900,000 & \\\hline\end{array}$$ How much is the target full product cost in total for the year? Assume all units produced are sold.

• A) $18,000,000
• B) $15,915,000
• C) $13,900,000
• D) $2,085,000

---

Definitions:

Norming Stage

Refers to the stage in group development where members establish norms, roles, and build relationships to facilitate group harmony and teamwork.

Critical Zone

An area of the Earth's surface where the interaction between the lithosphere, atmosphere, hydrosphere, and biosphere shapes our planet's environment.

Long-term Gains

Benefits or advantages that are realized over an extended period of time, often resulting from investment or strategic planning.

Membership Homogeneity

The extent to which the members of a group share similar characteristics, backgrounds, or attributes.