A Company Expects to Produce and Sell a Single Product

question 132

Essay

A company expects to produce and sell a single product.Management desires a 13% return on assets of $2,100,000.The following additional company information is available:
$\begin{array}{lr}\text { Variable costs (per unit) }\\\text { Production costs } & \$ 62 \\\text { Nonproduction costs } & \$ 8 \\\text { Fixed costs (in total) } & \\\text { Overhead } & \$ 521,280 \\\text { Nonproduction } & \$ 397,824\end{array}$ Required:
Compute selling price per unit given that markup percentage equals desired profit divided by total costs under the following independent assumptions:
a.The company produced and sold 19,200 units
b.The company produced and sold 114,888 units

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Definitions:

Classical Conditioning

An associative learning process where two stimuli are constantly paired together; the second stimulus initially causes a response which in time is caused by the first stimulus alone.

Acquisition

The phase during learning when a response is established and gradually strengthened.

Stimulus Generalization

The process by which a response that has been learned to one stimulus is also elicited by similar, but not identical, stimuli.

Stimulus Generalization

A process in conditioning where a response to a specific stimulus becomes associated with other stimuli that are similar to the original stimulus.