Outrigger Leisure Products Sells 2200 Kayaks Per Year at a Price

question 91

Multiple Choice

Outrigger Leisure Products sells 2200 kayaks per year at a price of $450 per unit.Outrigger sells in a highly competitive market and uses target pricing.The company has $1,000,000 of assets and the shareholders wish to make a profit of 17% on assets.Fixed costs are $450,000 per year and cannot be reduced.Assume all products produced are sold.What are the target variable costs?

• A) $139,401
• B) $1,000,000
• C) $820,000
• D) $370,000

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Definitions:

Control Group

In experimental research, a group of subjects that does not receive the treatment or intervention being studied and is used as a benchmark to measure the effects of that treatment.

Experimental Group

In research, the group of participants that receives the treatment or intervention being tested, contrasted with the control group.

Independent Variable

The variable that is intentionally changed or manipulated in an experiment to observe its effect on the dependent variable.

Dependent Variable

In experimental and statistical research, the variable being tested and measured, subject to change under the influence of the independent variable.