Home / Questions / The pricing objective of maximizing profits a. must be considered when determining th
The pricing objective of maximizing profits
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a. |
must be considered when determining the price needed to increasemarket share. |
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b. |
has not been affected by other, more socially focusedconcerns. |
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c. |
has not always been considered the underlying objective of anypricing policy. |
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d. |
is to be implemented under any and all circumstances. |
Development of a transfer price involves
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a. |
the use of the highest external market price so that thetransferring division is very profitable. |
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b. |
computation of the selling and delivery costs of the item beingtransferred. |
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c. |
the use of a team of lawyers representing the outside interestsof the company. |
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d. |
determination of an appropriate profit markup. |
The state of Illinois has passed a law requiring that everyautomobile be inspected at least once a year for pollution control.Anfang Enterprises is considering entering into this type ofbusiness. After extensive studies, Joseph Anfang has developed thefollowing set of projected annual data on which to make hisdecision:
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Direct service labor |
$363,000.00 |
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Variable service overhead costs |
270,000.00 |
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Fixed service overhead costs |
280,000.00 |
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Marketing expenses |
120,000.00 |
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General and administrative expenses |
170,000.00 |
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Minimum profit |
90,000.00 |
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Cost of assets employed |
500,000.00 |
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Anfang believes that his company will inspect 100,000 automobilesper year. The company earns an average of 18.75 percent return onits assets.
The projected cost for inspecting each automobile would be
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a. |
$12.03. |
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b. |
$12.93. |
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c. |
$10.03. |
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d. |
$11.13. |
Dec 02 2019 View more View Less
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