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Home Q & A Board Other Fields Homework Help Business Accounting
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7 years ago
Battista Stationery Company is a price-taker and uses target pricing. The company has completed an analysis of its revenues, costs, and desired profits and has calculated its target full product cost. Refer to the following information:

Target full product cost   $600,000    per year
Actual fixed cost   $280,000    per year
Actual variable cost   $3    per unit
Production volume   150,000    units per year

Actual costs are currently higher than target full product cost. Assume all products produced are sold.  Assuming that variable costs are dependent on commodity prices and cannot be reduced, what is the target fixed cost?
A) $320,000
B) $150,000
C) $600,000
D) $450,000
Textbook 
Horngren's Financial & Managerial Accounting, The Financial Chapters

Horngren's Financial & Managerial Accounting, The Financial Chapters


Edition: 5th
Authors:
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Mrgo-breedMrgo-breed
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Deprecated Author
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#2
7 years ago
This was certainly a tough question, loving the expertise
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#3
7 years ago
Happy to help Smiling Face with Open Mouth
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#4
4 years ago
Thank you
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