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e Whitten Company uses cost-plus pricing with a 40% mark-up. The company is currently selling 20,000 units at $21 per unit. Each unit has a variable cost of s10. In addition the company incurs $100,000 in fixed costs annually. If demand falls to 16,000 units how much will the company have to charge per unit in order to earm the same annual profit? A. $21.75 B. $22.50 C. $23.75 D. $22.75 c) Th company believes it can sell 1,000,000 units of its proposed new can opener at a price of $14.00 each. If the company desires to make a profit $3,000,000 on the can opener, what is the target cost per can opener? A. $14.00 B. $11.00 C. $8.00 D. S17.00 d) A ffice Products Company has analyzed the indirect costs associated with servicing its various customers in order to assess customer profitability. Results appear in the table below: Annual Driver Quantity Cost Pool Annual Cost Cost Driver Processing electronic $1,000,000 Number of orders 500,000 400,000 1,000,000 50,000,000 50,000 orders Processing non- electronic orders Picking orders $2,000,000 Number of orders $3,000,000 Number of different $1,500,000 Number of items S3,000,000 Number of returns ucts ordered Packaging orders ordered Returns What is the allocation rate for the cost of a return? A. $3,000,000 B. $60 C. $50,000 D. $0.017 Question 5 (10 Marks) Bounus Ben's Bikes sells two mountain bikes for every four street bikes. The mountain bike sells for $2,000 and has variable costs of $1,4 50. The street bike sells for $500 and has variable costs of $200. Instructions: A) If Ben's Bikes fixed costs total $1,620,000, how many bikes must be sold in order for the company to break even? (6 Marks) B) How many of these bikes will be mountain bikes and how many will be the street bikes? (4 Marks) 15

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