Diehl Company Makes a Product with the Following Costs

question 7

Multiple Choice

Diehl 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 52,000 units per year.
The company has invested $420,000 in this product and expects a return on investment of 8%.
Direct labor is a variable cost in this company.
-If every 10% increase in price leads to an 11% decrease in quantity sold, the profit-maximizing price is closest to:

• A) $234.46
• B) $214.69
• C) $256.45
• D) $78.50

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Definitions:

Truth Values

The status of propositions in logic, indicating whether they are true, false, or, in some logics, other values such as "unknown."

Truth Table

A computational tool in logic, designed as a table, which assesses the values of logical expressions on their respective functional arguments.

Atomic Sentences

Simple sentences that contain no logical connectors or quantifiers and state a fact about a single entity or a relationship between entities.

Truth Values

In logic, the attribution of truth or falsity to a proposition, typically represented as true (T) or false (F).