Luminous Company Sells a Product for $450 Per Unit

question 96

Multiple Choice

Luminous Company sells a product for $450 per unit. Its market share is 25 percent. The marketing manager feels that the market share can be increased to 33 percent with a reduction in price to $390. The product is currently earning a profit of $72 per unit. The president of Luminous Company feels that the $72 profit per unit must be maintained. What is the original cost per unit?

• A) $390
• B) $450
• C) $378
• D) $318

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Definitions:

Bank Reconciliation

The process of matching and balancing figures in accounting records with those displayed on a bank statement.

Outstanding Checks

Checks that have been written and recorded in the account ledger but have not yet been cashed or cleared by the bank.

Debit Memorandum

A document issued by a buyer to a seller indicating a deduction from the amount payable to the seller, often due to returned goods or errors.

Internal Control Problems

Issues or weaknesses in a company's processes that threaten its ability to ensure accurate financial reporting, compliance with laws, and effective and efficient operations.