Acton Company Is a Price-Taker and Uses Target Pricing With the Current Cost Structure,Acton Cannot Achieve Its Profit Goals

question 150

Multiple Choice

Acton Company is a price-taker and uses target pricing.Refer to the following information: $$\begin{array} { | l | r | l | } \hline \text { Production volume } & 602,000 & \text { units per year } \\\hline \text { Market price } & \$ 30 & \text { per unit } \\\hline \text { Desired operating income } & 15 \% & \text { of total assets } \\\hline \text { Total assets } & \$ 13,800,000 & \\\hline \text { Variable cost per unit } & \$ 18 & \text { per unit } \\\hline \text { Fixed cost per year } & \$ 5,500,000 & \text { per year } \\\hline\end{array}$$ With the current cost structure,Acton cannot achieve its profit goals.It will have to reduce either the fixed costs or the variable costs.Assuming that variable costs cannot be reduced,what are the target fixed costs per year? Assume all units produced are sold.

• A) $5,154,000
• B) $5,500,000
• C) $12,560,000
• D) $10,836,000

Calculate and interpret standard deviation and its application in the normal distribution curve.

Apply test statistics to evaluate academic programs and predict academic performance.

Identify and differentiate between different types of scales (ordinal, ratio, nominal, interval) and their characteristics.

Understand and apply the concepts of standard scores, mean, standard deviation, and their calculations.

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Definitions:

Mental Ability

Refers to the capacity to perform cognitive tasks, understand complex ideas, learn from experience, apply logic and reason, and adapt to new situations.

Voidable

Voidable refers to a legal term indicating that a contract or agreement is valid and enforceable but can be annulled by one party due to certain circumstances, such as misrepresentation or duress.

Disaffirm

The legal act of denying or rejecting the validity of a contract or agreement, especially by a party who was minor at the time of entering the contract.

Public Policy

Principles and standards considered by the government in the administration of justice and the enactment of laws, reflecting the social and economic priorities of the community.