Rica Company Is a Price-Taker and Uses a Target-Pricing Approach

question 175

Multiple Choice

Rica Company is a price-taker and uses a target-pricing approach.Refer to the following information: $$\begin{array} { | l | c | l|} \hline \text { Production volume } & 600,000 &\text { units per year } \\\hline \text { Market price } & \$ 30& \text { per unit } \\\hline \text { Desired operating income } & 17 \%& \text { of total assets } \\\hline \text { Total assets } & \$ 13,900,000 \\\hline\end{array}$$ What is the desired profit for the year?

• A)$102,000
• B)$18,000,000
• C)$4,100,000
• D)$2,363,000

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Definitions:

Quality Function Deployment

A systematic approach used to incorporate customer requirements into every phase of product development and production.

Planning Matrix

A tool or framework used to organize, prioritize, and systematically assess various aspects of a plan or project.

Customer "Wants"

The desires or needs of customers that companies seek to satisfy with their products or services.

Production Process

The series of steps and operations involved in the creation of a product, from raw materials to the finished goods.