Well-Bread Grain Company Is a Price-Taker and Uses Target Pricing

question 61

Multiple Choice

Well-Bread Grain Company is a price-taker and uses target pricing.The company has just done an analysis of its revenues,costs,and desired profits and has calculated its target full product cost.Assume all products produced are sold.Refer to the following information: $$\begin{array} { | l | r | l | } \hline \text { Target full product cost } & \$ 500,000 & \text { per year } \\\hline \text { Actual fixed cost } & \$ 280,000 & \text { per year } \\\hline \text { Actual variable cost } & \$ 2 & \text { per unit } \\\hline \text { Production volume } & 150,000 & \text { units per year } \\\hline\end{array}$$ Actual costs are currently higher than target full product cost.Assuming that fixed costs cannot be reduced,what is the target variable cost per unit? (Round your answer to the nearest cent.)

• A)$3.33
• B)$1.47
• C)$1.87
• D)$2.00

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Definitions:

N2 Sleep

A stage of sleep characterized by sleep spindles and K-complexes, representing a deeper sleep than N1 and preceding the deeper N3 stage of sleep.

N3 Sleep

The third stage of non-REM sleep, characterized by deep sleep and the lowest levels of physiological activity within the sleep cycle.

REM Sleep

A phase of sleep characterized by rapid eye movements, dreaming, and heightened brain activity.

N1 Sleep

The initial stage of the sleep cycle, characterized by light sleep and the transition from wakefulness into deeper sleep stages.