Variable costs change directly with the level of production.Select one:TrueFalsetionCost-based pricing involves setting prices based on consumer perception of value.Select one:TrueO FalsemonAdvertisements for prescription medications often highlight the medication's possible advantagesas well as the risks associated with its use. These advertisements present opposing viewpoints.Select one:O TrueO Falseona strategy in which the company charges the same price plus freight to all customers, regardlessof their location is related to :Select one:a. Uniform-delivered pricingb. Zone pricingaonC. Freight-absorption pricingd. FOB pricing

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Description: Variable costs change directly with the level of production.Select one:TrueFalsetionCost-based pricing involves setting prices based on consumer perception of value.Select one:TrueO FalsemonAdvertisements for prescription medications often highlight

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Variable costs change directly with the level of production. Select one: True False

Essentials of Business Analytics (MindTap Course List)

2nd Edition

ISBN:9781305627734

Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson

Publisher:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson

Chapter13: Nonlinear Optimization Models

Section: Chapter Questions

Problem 10P: Phillips Inc. produces two distinct products, A and B. The products do not compete with each other...

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A company is providing its product to the consumer through the wholesalers. The managing director of the company thinks that if the company starts selling through retailers or to the consumers directly, it can increase its sales, charge higher prices and make more profit. On the basis of the following information and consider variable cost is rial 2.50 per unit and fixed cost is rial 50000. (a) Advise the managing director whether the company should change its channel of distribution or not (with calculation and Justification). (b) Provide suggestions and recommendations on the basis of analysis.
a) Compare and contrast variable cost-plus pricing and target pricing, and indicate the circumstances in which each might be appropriate. b) Compute the selling price based on the compay’s pricing policy and indicate whether the customer’s maximum price is consistent with the company’s pricing policy. c) Assume that further tests have confirmed the product’s useful life, and that SA Berhad wishes to maximise profits by reducing costs. Indicate techniques which could be used to achieve a reduction in the product cost. d) Define Business Process Re-engineering (BPR).
The absorption costing approach to cost-plus pricing is the safest method to use regardless of unit sales considers customer demand for the product relies on forecasted unit sales assumes that customers will pay whatever price the company decides to charge makes pricing look simple
a difference in cost-plus pricing and target costing is that target costing starts with the price customers are willing to pay whereas cost-plus pricing starts with the cost. computes the desired markup while cost-plus pricing computes the maximum cost the company is willing to incur. is generally determined after introducing a product and cost-plus pricing is determined before introducing a product. is a simple approach while cost-plus pricing is relatively complex.
Due to change in market conditions a company finds that it can sell as many of each of its three main products as it can produce. Which one of the following is most important in determining which of the three products to produce and market? * a. Sales price per unit b. Contribution margin per unit c. Contribution margin per hour of production time available d. Sales price less full absorption cost per hour of production time available
The line that begins at the origin on a CVP graph represents total expenses. total fixed expenses. total sales revenues. both the total expenses and the total sales revenues. Which of the following best describes the concept of a "constraint?" Expected future costs that differ among alternatives. None of the items in this list of answers. A benefit foregone by choosing one alternative course over another. The distribution of all products to be sold.
T, F. In a make or buy short-run decision situation, the critical element to consider is whether the variable cost to produce the item is higher or lower the competitor’s selling price. T, F. In absorption costing method, gross margin is the term used to describe the difference between sales and variable costs. T, F. In Variable costing method, contribution margin is used to describe the difference between sales and variable costs. T, F. Although variable costing may provide useful information for internal controls and pricing, it is not generally accepted inventory valuation system by IRS and AICPA. T, F. One of the disadvantages of Variable Costing method is that it ignores the principle of matching revenues with related costs.
Which of the following is not an application of cost-volume-profit analysis? Setting prices for products and services. Performing strategic “what-if” analyses. Deciding whether to cut a product line. Determining the short-term cost or profit implications of many decisions. Deciding whether to make or buy a given product or service.
You decide to increase advertising, you will not change the selling price and variable cost per unit do not change. In this scenario, your breakeven point in units will Group of answer choices: Increase decrease stay the same the answer cannot be determined from the given information
Morrisons Plastics Division, a profit center, sells its products to external customers as well as to other internal profit centers. Which one of the following circumstances would justify the Plastics Division selling a product internally to another profit center at a price that is below the market-based transfer price? a. The buying unit has excess capacity. b. The selling unit is operating at full capacity. c. Routine sales commissions and collection costs would be avoided. d. The profit centers managers are evaluated on the basis of unit operating income.
CVP analysis with multiple products assumes that sales will continue at the same mix of products, expressed in either sales units or sales dollars. This assumption is essential, because a change in the product mix will probably change: Multiple Choice The average variable cost per unit. The average sales price per unit. The weighted-average contribution margin (per unit or ratio). The total fixed cost. The average contribution margin (per unit or ratio).
Looking for the break-even point from the information provided. The Smiths need to develop an analysis of their breakeven point for the plastic display case based on sales of the product directly to the consumer as well as through retailers. If the product were sold to retailers, the price would have to provide retailers with an adequate markup. Exhibit C7.4 presents the expected cost structure for the Unique Display Cases display case developed by their accountant. Based on competitive prices, the Smiths expected to offer their product in direct to consumer sales for $24.99 plus $2.99 for shipping and handling. The price to retailers would have to be negotiated but would be 30–40% less to allow an adequate markup for the retail firms. The production cost of $7.50 was based on a production run of 5000 units in one color. At 10,000 or more units, production cost would drop to $5.75 per unit. The company that would produce the plastic unit had production capacity of 25,000 units a year.…