Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. origami company is a price-taker and uses target p

Origami Company is a price-taker and uses target pricing. Please refer to the following information:...

60.1K

Verified Solution

Question

Accounting

  1. Origami Company is a price-taker and uses target pricing. Please refer to the following information:

Production volume

500,000

Units per year

Market price

$24.00

Per unit

Desired operating profit

12%

Of total assets

Total assets

$12,500,000

Variable cost per unit

$17.00

Per unit

Fixed cost per year

$3,000,000

Per year

With the current cost structure, Origami cannot achieve its profit goals. It will have to reduce either the fixed costs or the variable costs.

Assuming that fixed costs CANNOT be reduced, how much will the target variable costs per unit be? (Please round to nearest cent.)

A) $14.67 B) $16.25 C) $15.00 D) $17.50

  1. Polynesian Products sells 1,800 kayaks per year at a price of $480 per unit. Polynesian sells in a highly competitive market and uses target pricing. The company has calculated its

target full cost at $729,000 per year. Total variable costs are $396,000 per year and cannot be reduced. How much are the target fixed costs?

A) $265,000 B) $410,000 C) $396,000 D) $333,000

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students