Chris Company Sells a Product for £225 Per Unit

question 39

Multiple Choice

Chris Company sells a product for £225 per unit. Its market share is 20 percent. The marketing manager feels that the market share can be increased to 30 percent with a reduction in price to £195. The product is currently earning a profit of £36 per unit. The president of Chris Company feels that the £36 profit per unit must be maintained. What is the target cost per unit?

• A) £225
• B) £195
• C) £189
• D) £159

Identify the characteristics and objectives of process costing systems.

Differentiate between the FIFO and weighted-average methods of computing equivalent units.

Recognize the classification of costs in process costing (direct materials, direct labor, and manufacturing overhead).

Understand the concept of conversion costs and how they are calculated.

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Definitions:

Read-Only Memory (ROM)

Non-volatile storage medium in computers and electronic devices, containing permanent or semi-permanent data that cannot be easily altered or erased.

Binary System

A numeral system that uses only two symbols, typically 0 and 1, to represent numerical values.

Desktop Theme

A cohesive set of visual design elements for a computer's desktop environment, including wallpaper, icons, and window appearance.

Projector

An optical device that projects images or videos from a computer or other media source onto a screen or surface for larger viewing.