A Custom Kitchen Cabinet Storeowner Wishes to Use a Target

Multiple Choice

A custom kitchen cabinet storeowner wishes to use a target return-on-sales pricing approach to establish a price for a typical section of cabinets.Assume that variable costs total $200 per unit,fixed cost is $44,000,and the storeowner desires a target profit of 20 percent return on sales at an annual volume of 400 cabinets.What price should be charged for a typical cabinet section?

A) $263.50
B) $311.00
C) $387.50
D) $445.50
E) $775.00