The Current Selling Price for the Pluto, a Mid-Sized Car

question 153

Multiple Choice

The current selling price for the Pluto, a mid-sized car, is $19,000.For next year it is anticipated that Pluto will have a $12,000 cost base.What is its prospective selling price, using cost-plus pricing, if the company desires a markup component of 15 percent?

• A)$10,200
• B)$13,800
• C)$19,000
• D)$30,000
• E)$31,000

---

Definitions:

Net Operating Income

A measure of a company's financial performance, calculated as revenues minus expenses from operations, not including non-operating income and expenditures.

Operating Assets

Assets employed in the day-to-day operations of a business that are expected to generate economic benefits, including both current and non-current assets.

Transfer Price

The price charged by one division of a company for products or services that it supplies to another division within the same company.

Valve Division

A specialized department or segment of a company focused on the production and distribution of valves.