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As the Marketing and Sales Manager,you Are in Charge of Setting

Question 218

Multiple Choice

As the marketing and sales manager,you are in charge of setting the selling prices of prize-winning music boxes with changeable songs.After you explained two cost-plus approaches to price setting,the CEO chose the straightforward approach of full-cost pricing.The next day,you received an unexpected order for 10,000 units from a Swiss contact with a tight deadline. ​
Required:
​What information do you need immediately to arrive at a selling price that you can justify to the CEO?


A) ​value of resources consumed in the production of the music boxes
B) ​overhead expenses, profit margin, and direct cost per music box
C) ​fixed costs of production, variable costs, and revenue
D) ​manufacturing capacity and customer's price point of willingness to pay
E) ​acceptable loss-leader pricing, prescribed rate of return, and financing

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