Answer the following questions using the information below: Gracius Manufacturing is approached by a European customer to fulfill a one-time-only special order for a product similar to one offered to domestic customers. Gracius Manufacturing has a policy of adding a 10% markup to full costs and currently has excess capacity. The following per unit data apply for sales to regular customers: $\begin{array}{l} \text { Variable costs: }\\ \begin{array}{lr} \text { Direct materials } & \$ 30 \\ \text { Direct labor } & 10 \\ \text { Manufacturing overhead } & 20 \\ \text { Marketing costs } & 10 \end{array}\\ \text { Fixed costs: }\\ \begin{array}{lr} \quad {\text { Manufacturing overhead }} & 100 \\ \quad \text { Marketing costs } & 20 \\ \text { Total costs } & 190 \\ \text { Markup (10\% of total costs) } & 19 \\ \text { Estimated æelling price } & \$ 209 \end{array} \end{array}$ -For Gracius Manufacturing,what is the minimum acceptable price of this one-time-only special order?

A) $40 B) $60 C) $70 D) $190 A) $40 B) $60 C) $70 D) $190

Exam 13: Pricing Decisions and Cost Management

Answer the following questions using the information below: Crimpson Company has invested $2,000,000 in a plant to make commercial juicer machines. The target operating income desired from the plant is $299,000 annually. The company plans annual sales of 7,000 juicer machines at a selling price of $400 each. -What is the cost base of each juicer machine for Crimpson Company?

(Multiple Choice)

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Question 41

Answer the following questions using the information below: Sales of Blair Inc. have been on a steady decline for the last 12 months. A market research study conducted revealed that the product of Blair Inc. can be sold only for $400 as opposed to the current market price charged of $500 per unit. Blair Inc. has decided to revise its sales price to $400. The annual sales target volume of the product after price revision is 200 units. Blair Inc. wants to earn 18% on its sales amount. -What is the total target cost?

(Multiple Choice)

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Question 42

________ is a cost that,if eliminated,would reduce the actual or perceived value or utility (usefulness)customers experience from using the product or service.

(Multiple Choice)

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Question 43

All costs are locked in at the design stage itself.

(True/False)

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Question 44

Rework is an example of a value-added cost.

(True/False)

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Question 45

________ describes when a resource is consumed or benefit forgone to meet a specific objective.

(Multiple Choice)

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Question 46

Which of the following statements is true regarding cost-plus pricing?

(Multiple Choice)

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Question 47

Answer the following questions using the information below: Gracius Manufacturing is approached by a European customer to fulfill a one-time-only special order for a product similar to one offered to domestic customers. Gracius Manufacturing has a policy of adding a 10% markup to full costs and currently has excess capacity. The following per unit data apply for sales to regular customers: Variable costs: Direct materials \ 30 Direct labor 10 Manufacturing overhead 20 Marketing costs 10 Fixed costs: Manufacturing overhead 100 Marketing costs 20 Total costs 190 Markup (10\% of total costs) 19 Estimated æelling price \ 209 -For Gracius Manufacturing,what is the minimum acceptable price of this one-time-only special order?

(Multiple Choice)

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Question 48

Answer the following questions using the information below: Crimpson Company has invested $2,000,000 in a plant to make commercial juicer machines. The target operating income desired from the plant is $299,000 annually. The company plans annual sales of 7,000 juicer machines at a selling price of $400 each. -What is the markup percentage as a percentage of cost for Crimpson Company?

(Multiple Choice)

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Question 49

Price discrimination is permissible if the intent is only to lessen or prevent competition.

(True/False)

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Question 50

Whether the firm uses the market-based approach or the cost-based approach for pricing decisions,the market forces must be considered.

(True/False)

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Question 51

Roberto Inc.,operates a chain of luxury hotels in the Asia-Pacific region.It charges $150 for one night stay.However when 90% of the rooms are occupied,Roberto charges a premium of 20% on room tariff for the remaining rooms.What pricing method has Roberto Inc.adopted?

(Multiple Choice)

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Question 52

Companies operating in markets that are not competitive favor cost-based approaches.

(True/False)

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Question 53

Which of the following statements is true of the cost of producing a product?

(Multiple Choice)

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Question 54

Value engineering seeks to reduce value-added costs as well as nonvalue-added costs.

(True/False)

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Question 55

Companies seek to minimize value-added costs because they do not provide benefits to customers.

(True/False)

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Question 56

The department usually in the best position to identify customers' needs is the ________.

(Multiple Choice)

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Question 57

In cost-plus pricing,the markup is a rigid number that determines the actual selling price.

(True/False)

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Question 58

Long-run pricing decisions ________.

(Multiple Choice)

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Question 59

Answer the following questions using the information below: After conducting a market research study, Ed Manufacturing decided to produce a new interior door to complement its exterior door line. It is estimated that the new interior door can be sold at a target price of $240. The annual target sales volume for interior doors is 20,000. Ed has target operating income of 20% of sales. -What are target sales revenues?

(Multiple Choice)

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Question 60

Showing 41 - 60 of 210

________ is a cost that,if eliminated,would reduce the actual or perceived value or utility (usefulness)customers experience from using the product or service.

All costs are locked in at the design stage itself.

Rework is an example of a value-added cost.

________ describes when a resource is consumed or benefit forgone to meet a specific objective.

Which of the following statements is true regarding cost-plus pricing?

Price discrimination is permissible if the intent is only to lessen or prevent competition.

Whether the firm uses the market-based approach or the cost-based approach for pricing decisions,the market forces must be considered.

Roberto Inc.,operates a chain of luxury hotels in the Asia-Pacific region.It charges $150 for one night stay.However when 90% of the rooms are occupied,Roberto charges a premium of 20% on room tariff for the remaining rooms.What pricing method has Roberto Inc.adopted?

Companies operating in markets that are not competitive favor cost-based approaches.

Which of the following statements is true of the cost of producing a product?

Value engineering seeks to reduce value-added costs as well as nonvalue-added costs.

Companies seek to minimize value-added costs because they do not provide benefits to customers.

The department usually in the best position to identify customers' needs is the ________.

In cost-plus pricing,the markup is a rigid number that determines the actual selling price.

Long-run pricing decisions ________.

The Manager and Management Accounting

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Job Costing

Activity-Based Costing and Activity-Based Management

Master Budget and Responsibility Accounting

Flexible Budgets, direct-Cost Variances, and Management Control

Flexible Budgets, overhead Cost Variances, and Management Control

Inventory Costing and Capacity Analysis

Determining How Costs Behave

Decision Making and Relevant Information

Strategy, balanced Scorecard, and Strategic Profitability Analysis

Cost Allocation, customer-Profitability Analysis, and Sales-Variance Analysis

Allocation of Support-Department Costs, common Costs, and Revenues

Cost Allocation: Joint Products and Byproducts

Process Costing

Spoilage, rework, and Scrap

Balanced Scorecard: Quality and Time

Inventory Management, just-In-Time, and Simplified Costing Methods

Capital Budgeting and Cost Analysis

Management Control Systems, transfer Pricing, and Multinational Considerations

Performance Measurement, compensation, and Multinational Considerations

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