Mini-Case 11-1: Pricing for Profit

question 76

Essay

Mini-Case 11-1: Pricing for Profit
Miller Manufacturing, Inc., produces electronic components for television circuitry. Variable costs comprise 67 percent of the product's selling price. The variable costs of producing a component include:
Direct material $1.83/unit
Direct labor $6.72/unit
Variable factory overhead $ .86/unit
Vicki Miller, President, expects to produce 80,000 electronic components and to incur $280,000 of fixed costs.
-What is the minimum price that Miller Manufacturing should set for its electrical components?

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Definitions:

Dream Analysis

A psychoanalytic therapy technique that interprets the hidden meaning of dreams.

Free Association

A therapeutic method in psychoanalysis where the patient speaks freely to reveal the unconscious thoughts and feelings that might be causing psychological distress.

The Occult

Practices, beliefs, or phenomena that are beyond the scope of scientific explanation, often associated with the supernatural or mystical.

Principle of Entropy

A concept in thermodynamics referring to the measure of disorder or randomness in a system, often associated with the second law of thermodynamics.