Well-Bread Grain Company Is a Price-Taker and Uses Target Pricing

question 127

Multiple Choice

Well-Bread Grain 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 is the target variable cost per unit? (Round your answer to the nearest cent. )

• A)$3.33
• B)$1.47
• C)$1.87
• D)$2.00

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Definitions:

Bonds

Financial instruments representing a loan made by an investor to a borrower, typically corporate or governmental, which includes terms for variable or fixed interest payments and the return of the original investment at maturity.

Purchase Money Security Interest

A security interest that arises when someone lends money to a consumer and then takes a security interest in the goods that the consumer buys.

Floating Lien

A security interest or claim against assets that are not fixed but rather change in quantity and value over time, such as inventory or accounts receivable.

Priority

The established order of importance or precedence, often used in contexts where resources are limited or decisions must be made based on urgency.