Exam 12: Pricing Products and Services

Clulow Corporation recently changed the selling price of one of its products.Data concerning sales for comparable periods before and after the price change are presented below. The product's variable cost is $10.50 per unit. The product's profit-maximizing price according to the formula in the text is closest to:

Eakins Corporation has just developed a new product.At an expected sales level of 60, 000 units per year, the company anticipates that the following costs will be incurred: Eakins Corporation uses the absorption costing approach to cost-plus pricing as described in the text. Assume that after introducing the new product, the company finds that it has excess capacity.A foreign dealer has offered to purchase 2, 000 units at a special price of $36 per unit.This sale would not disturb regular business.If the special price is accepted on the 2, 000 units, the company's overall net income for the year should: