If Selling Price Per Unit Is $55, Variable Costs Per

question 60

Multiple Choice

If selling price per unit is $55, variable costs per unit are $25, total fixed costs are $24,000, the tax rate is 35%, and the company sells 7,000 units, net income is ________.

• A) $186,000
• B) $75,250
• C) $136,500
• D) $120,900

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Definitions:

Prestige Pricing

A pricing strategy where prices are set high to create a perception of exclusivity and high quality, often used for luxury goods.

High-quality Product

A product that surpasses ordinary standards of performance, durability, and design, and meets or exceeds customer expectations.

Penetration Pricing

Penetration pricing is a marketing strategy used to attract customers to a new product or service by offering a lower price initially.

Penetration Pricing

A pricing strategy where a product is priced lower than the competition to attract customers and gain market share quickly.