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

question 195

Multiple Choice

Discourse Stationery Company is a price-taker and uses target pricing. The company has completed an analysis of its revenues, costs, and desired profits and has calculated its target full product cost. Refer to the following information: $$\begin{array} { | l | r | l | } \hline \text { Target full product cost } & \$ 500,000 & \text { per year } \\\hline \text { Actual fixed cost } & \$ 270,000 & \text { per year } \\\hline \text { Actual variable cost } & \$ 3 & \text { per unit } \\\hline \text { Production volume } & 140,000 & \text { units per year } \\\hline\end{array}$$ Actual costs are currently higher than target full product cost. Assume all products produced are sold. Assuming that variable costs are dependent on commodity prices and cannot be reduced, what is the target fixed cost?

• A) $230,000
• B) $420,000
• C) $80,000
• D) $500,000

Comprehend the influence of gender and biological differences on cognitive abilities and preferences.

Understand the different perspectives and theories explaining the role and impact of religion in society.

Recognize the major religions in the world and their distributions.

Comprehend how social institutions, particularly family and religion, adapt and change in response to societal changes such as industrialization.

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Definitions:

Input

Resources used in the production process of goods or services, including labor, materials, and capital.

Removing Subsidy

The process of eliminating financial support provided by governments to businesses, individuals, or other government departments.

Equilibrium Price

The price point at which the quantity of goods demanded equals the quantity of goods supplied, without any external intervention.

Equilibrium Price

The price at which the quantity of a good or service demanded by consumers equals the quantity supplied by producers, leading to market balance.