Rica Company Is a Price-Taker and Uses Target Pricing With the Current Cost Structure, Rica Cannot Achieve Its Profit

question 96

Multiple Choice

Rica Company is a price-taker and uses target pricing. Refer to the following information: $$\begin{array} { | l | r | l | } \hline \text { Production volume } & 600,000 &\text { units per year } \\\hline \text { Market price } & \$ 30 & \text { per unit } \\\hline \text { Desired operating income } & 15 \% & \text { of total assets } \\\hline \text { Total assets } & \$ 13,900,000 & \\\hline \text { Variable cost per unit } & \$ 18 & \text { per unit } \\\hline \text { Fixed cost per year } & \$ 5,600,000 & \text { per year } \\\hline\end{array}$$ With the current cost structure, Rica cannot achieve its profit goals. It will have to reduce either the fixed costs or the variable costs. Assuming that variable costs cannot be reduced, how much will be the target fixed costs per year?

• A) $5,115,000
• B) $5,600,000
• C) $10,315,000
• D) $5,200,000

Comprehend the process and importance of political socialization.

Recognize the foundational political theories and their modern interpretations.

Determine the concept of public opinion and its measurement.

Identify the characteristics and differences between liberalism and conservatism.

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Definitions:

Federal Sentencing Guidelines

Regulations that set forth a uniform sentencing policy for individuals and organizations convicted of felonies and serious misdemeanors in the United States.

Open Compliance Ethics Group

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Sarbanes-Oxley Act

A U.S. federal law enacted in 2002 to protect investors from fraudulent financial reporting by corporations, mandating strict reforms to improve financial disclosures and prevent accounting fraud.

Financially Burdensome

Describing a situation or requirement that imposes a significant financial strain or expense on an individual or organization.