The State of Illinois Has Passed a Law Requiring That

question 6

Multiple Choice

The state of Illinois has passed a law requiring that every automobile be inspected at least once a year for pollution control.Anfang Enterprises is considering entering into this type of business.After extensive studies,Joseph Anfang has developed the following set of projected annual data on which to make his decision: $\begin{array}{lr}\text { Direct service labor } & \$ 363,000.00 \\\text { Variable service overhead costs } & 270,000.00 \\\text { Fixed service overhead costs } & 280,000.00 \\\text { Marketing expenses } & 120,000.00 \\\text { General and administrative expenses } & 170,000.00 \\\text { Minimum profit } & 90,000.00 \\\text { Cost of assets employed } & 500,000.00\end{array}$
Anfang believes that his company will inspect 100,000 automobiles per year.The company earns an average of 18.75 percent return on its assets.
The price to be charged for inspecting each automobile using the time and materials pricing method would be calculated as follows:

• A) ($913,000.00 ÷ 100,000) + {($913,000.00 ÷ 100,000) * [($90,000 + $290,000) ÷ $913,000.00]}
• B) ($1,203,000.00 ÷ 100,000) + [($1,203,000.00 ÷ 100,000) * ($90,000 ÷ $1,203,000.00)]
• C) ($1,203,000.00 ÷ 100,000) + [($500,000 ÷ 100,000) * 0.1875]
• D) None of these

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Definitions:

Digital Marketing

Marketing of products or services using digital channels to reach consumers through promotion of brands through various forms of digital media.

Mobile Phones

Portable electronic devices used for communication purposes, including voice calls, text messaging, and internet access, among other features.

Social Media Marketing

The use of social media platforms and websites to promote a product or service, building brand awareness and engaging with the target audience.

Promotional Strategy

A plan to increase awareness, sales, and market share for a product or service through advertising, sales promotions, public relations, and personal selling.