Solved

Dieckman Company Makes a Product with the Following Costs

Question 67

Multiple Choice

Dieckman Company makes a product with the following costs: Dieckman 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 71,000 units per year. The company has invested $360,000 in this product and expects a return on investment of 13%. Direct labor is a variable cost in this company. -If every 10% increase in price leads to a 12% decrease in quantity sold,the profit-maximizing price is closest to: A) $56.40 B) $130.10 C) $144.16 D) $134.03 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 71,000 units per year.
The company has invested $360,000 in this product and expects a return on investment of 13%.
Direct labor is a variable cost in this company.

-If every 10% increase in price leads to a 12% decrease in quantity sold,the profit-maximizing price is closest to:


A) $56.40
B) $130.10
C) $144.16
D) $134.03

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Q57: Finnie Company's management believes that every 5%

Q58: Boden Company's management believes that every 2%

Q59: Holding all other things constant,an increase in

Q60: Jaber Corporation makes a product with the

Q61: The management of Store Corporation would

Q62: Holding all other things constant,an increase in

Q63: Holding all other things constant,an increase in

Q64: Dieckman Company makes a product with the

Q65: If a company sells a product for

Q66: A new product,an automated crepe maker,is being