Star Stationery Company Is a Price-Taker and Uses Target Pricing

question 79

Multiple Choice

Star Stationery 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.Please refer to the following information:
-Actual costs are currently higher than target full product cost.Assuming that variable costs are dependent on commodity prices and cannot be reduced,how much is the target fixed cost?

• A)$180,000
• B)$300,000
• C)$200,000
• D)$500,000

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Definitions:

Dividends Declared

A portion of a company's earnings that is decided by the board of directors to be distributed to shareholders.

Statement Of Comprehensive Income

A financial statement that displays all changes in equity during a period except those resulting from investments by and distributions to the company’s shareholders.

Other Comprehensive Income

Income that includes all changes in equity from non-owner sources, such as foreign exchange adjustments or unrealized gains/losses on certain investments, not included in net income.

Vertical Analysis

A method of financial statement analysis in which each entry for each of the three major categories of accounts (assets, liabilities, and equity) is represented as a proportion of the total account.