Dieckman Company Makes a Product with the Following Costs

question 67

Multiple Choice

Dieckman Company makes a product with the following costs: The company uses the absorption costing approach to cost-plus pricing described in the text. The pricing calculations are based on budgeted production and sales of 71,000 units per year.
The company has invested $360,000 in this product and expects a return on investment of 13%.
Direct labor is a variable cost in this company.

-If every 10% increase in price leads to a 12% decrease in quantity sold,the profit-maximizing price is closest to:

• A)$56.40
• B)$130.10
• C)$144.16
• D)$134.03

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Definitions:

Primary Objectives

The main or most important goals, purposes, or targets that an individual, group, or organization aims to achieve.

Law

A system of rules created and enforced through social or governmental institutions to regulate behavior.

Harmony

A state of agreement or concord in relationships or musical notes producing a pleasing effect.

Stability

Refers to the state of being steady and not prone to change, often indicating reliability or consistency in various contexts.