Question 1

One of the risks of using only the variable cost as a base may tempt managers to cut prices as long as prices are above variable cost.

Accepted Answer

A) True 
 B)False

Question 2

The cost-plus pricing approach is generally in the form ________.

Accepted Answer

A) Cost base + Markup component = Prospective selling price 
B) Prospective selling price - Cost base = Markup component 
C) Cost base + Gross margin = Prospective selling price 
D) Variable cost + Fixed cost + Contribution margin = Prospective selling price 
A) Cost base + Markup component = Prospective selling price 
B) Prospective selling price - Cost base = Markup component 
C) Cost base + Gross margin = Prospective selling price 
D) Variable cost + Fixed cost + Contribution margin = Prospective selling price

Question 3

Predatory pricing occurs when companies in an industry conspire in their pricing and production decisions to achieve a price above the competitive price and so restrain trade.

Accepted Answer

A) True 
 B)False

Question 4

Environmental costs that are incurred over several years of the product's life cycle are often locked in at the product- and process-design stage.

Accepted Answer

A) True 
 B)False

Question 5

Xtech Games Inc.has a new video game cassette for the upcoming holiday season.It is trying to determine the target cost for the game if the selling price per unit will be set at $70,the going price for video games,and the firm wants to earn a target operating income of 30% of sales.What will be the target cost per unit for the new game?

Accepted Answer

A) $70 
B) $49 
C) $30 
D) $21 
A) $70 
B) $49 
C) $30 
D) $21

Question 6

In markets with little or no competition,the key factor affecting price is the cost of production to the company.

Accepted Answer

A) True 
 B)False

Question 7

All of the following are typical results of value engineering except:

Accepted Answer

A) assembling and analyzing competitor's product. 
B) setting the target cost and then designing the product. 
C) changes in material specifications to reduce costs 
D) modifications in process methods 
A) assembling and analyzing competitor's product. 
B) setting the target cost and then designing the product. 
C) changes in material specifications to reduce costs 
D) modifications in process methods

Question 8

Which of the following statements is true about the factors that affect pricing decisions?

Accepted Answer

A) Information about competitors' technologies is not useful for pricing decisions. 
B) Information about a competitor in a perfect market affects pricing decisions. 
C) Increase in price of a substitute product does not affect pricing decisions. 
D) Managers must always be aware of the competition when pricing their products 
A) Information about competitors' technologies is not useful for pricing decisions. 
B) Information about a competitor in a perfect market affects pricing decisions. 
C) Increase in price of a substitute product does not affect pricing decisions. 
D) Managers must always be aware of the competition when pricing their products

Question 9

Which of the following is not a step of value-engineering?

Accepted Answer

A) Understanding customer requirements and value-added and non-value added costs 
B) Set a price using the market approach 
C) Anticipating how costs are locked in before they are incurred 
D) Using cross-functional teams to redesign products and process to reduce costs while meeting customer needs 
A) Understanding customer requirements and value-added and non-value added costs 
B) Set a price using the market approach 
C) Anticipating how costs are locked in before they are incurred 
D) Using cross-functional teams to redesign products and process to reduce costs while meeting customer needs

One of the risks of using only the variable cost as a base may tempt managers to cut prices as long as prices are above variable cost.

The cost-plus pricing approach is generally in the form ________.

Predatory pricing occurs when companies in an industry conspire in their pricing and production decisions to achieve a price above the competitive price and so restrain trade.

Environmental costs that are incurred over several years of the product's life cycle are often locked in at the product- and process-design stage.

In markets with little or no competition,the key factor affecting price is the cost of production to the company.

All of the following are typical results of value engineering except:

Which of the following statements is true about the factors that affect pricing decisions?

Which of the following is not a step of value-engineering?

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

Filters

Exam 13: Pricing Decisions and Cost Management

One of the risks of using only the variable cost as a base may tempt managers to cut prices as long as prices are above variable cost.

The cost-plus pricing approach is generally in the form ________.

Predatory pricing occurs when companies in an industry conspire in their pricing and production decisions to achieve a price above the competitive price and so restrain trade.

Environmental costs that are incurred over several years of the product's life cycle are often locked in at the product- and process-design stage.

In markets with little or no competition,the key factor affecting price is the cost of production to the company.

All of the following are typical results of value engineering except:

Which of the following statements is true about the factors that affect pricing decisions?

Which of the following is not a step of value-engineering?

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

Filters