Abbott Company Is a Price-Taker and Uses Target Pricing

question 109

Multiple Choice

Abbott 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.Assume all products produced are sold.Refer to the following information:

Actual costs are currently higher than target full product cost.Assuming that fixed costs cannot be reduced,what are the target total variable costs?

• A)$260,000
• B)$302,000
• C)$240,000
• D)$500,000

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Definitions:

Color-blindness

A genetic condition where an individual's perception of colors is different from normal due to the lack of or malfunction of certain color-detecting molecules in the eyes.

Heterozygous

Possessing unlike alleles for a particular trait.

Down Syndrome

A genetic disorder caused by the presence of an extra 21st chromosome, leading to developmental and physical changes.

Disjunction

The separation of chromosomes or sister chromatids during cell division, leading to the distribution of genetic material into daughter cells.