Dotterel Corporation Uses the Variable Cost Concept of Product Pricing

question 80

Multiple Choice

Dotterel Corporation uses the variable cost concept of product pricing. Below is cost information for the production and sale of 35,000 units of its sole product. Dotterel desires a profit equal to a 11.2% rate of return on invested assets of $350,000. The variable cost per unit for the production and sale of the company's product is:

• A) $14.00
• B) $12.60
• C) $9.80
• D) $11.20

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Definitions:

Issuance

The process of officially issuing something, such as a document like a permit or license, or securities like bonds or stocks.

Indorsements

Signatures or stamps placed on a negotiable instrument, such as a check or promissory note, that specify the terms of its transfer or conditions of use.

Payable on Demand

A financial obligation that must be paid whenever the creditor requests it.

Nonnegotiable

Pertaining to something that cannot be transferred or assigned from one party to another, such as a nonnegotiable instrument or document.