HORNGREN'S COST ACCT >IA<
16th Edition
ISBN: 9780136675464
Author: Datar
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Chapter 13, Problem 13.35P
1.
To determine
Cost plus Pricing:
It is a cost-based technique used to set up the costs of products and enterprises. Under this approach, the immediate material cost, coordinate work cost, and overhead expenses for an item are included, and add to it a markup rate (to make an overall revenue) keeping in mind the end goal to ascertain the selling of the item.
To determine: The pricing policies of the company are violating the anti-trust laws or not.
2.
To determine
Reason for not offering lowest rice guarantee on Monday mornings and Friday evenings.
3.
To determine
Factors that are to be considered before the implementation of pricing policies.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
Global Airlines is a major low-price airline carrier for both domestic and international travel. The company guarantees the “lowest price” ticket for travel within the United States. The “lowest price” ticket guarantee does not apply for travel on Monday mornings and Friday evenings, which are busy travel times for business travelers.
Q. Do these pricing practices of Global Airlines violate any anti-trust laws? Why or why not?
Global Airlines is a major low-price airline carrier for both domestic and international travel. The company guarantees the “lowest price” ticket for travel within the United States. The “lowest price” ticket guarantee does not apply for travel on Monday mornings and Friday evenings, which are busy travel times for business travelers.
Q. Why is Global Airlines not offering a price guarantee for flights on Monday mornings and Friday evenings? Do you agree with this policy? Explain briefly.
Global Airlines is a major low-price airline carrier for both domestic and international travel. The company guarantees the “lowest price” ticket for travel within the United States. The “lowest price” ticket guarantee does not apply for travel on Monday mornings and Friday evenings, which are busy travel times for business travelers.
Q. What other factors should Global Airlines consider before implementing these pricing policies?
Chapter 13 Solutions
HORNGREN'S COST ACCT >IA<
Ch. 13 - What are the three major influences on pricing...Ch. 13 - Relevant costs for pricing decisions are full...Ch. 13 - Describe four purposes of cost allocation.Ch. 13 - How is activity-based costing useful for pricing...Ch. 13 - Describe two alternative approaches to long-run...Ch. 13 - What is a target cost per unit?Ch. 13 - Describe value engineering and its role in target...Ch. 13 - Give two examples of a value-added cost and two...Ch. 13 - It is not important for a company to distinguish...Ch. 13 - Prob. 13.10Q
Ch. 13 - Describe three alternative cost-plus pricing...Ch. 13 - Give two examples in which the difference in the...Ch. 13 - What is life-cycle budgeting?Ch. 13 - What are three benefits of using a product...Ch. 13 - Prob. 13.15QCh. 13 - Which of the following statements regarding price...Ch. 13 - Value-added, non-value-added costs. The Magill...Ch. 13 - Target operating income, value-added costs,...Ch. 13 - Target prices, target costs, activity-based...Ch. 13 - Target costs, effect of product-design changes on...Ch. 13 - Target costs, effect of process-design changes on...Ch. 13 - Cost-plus target return on investment pricing....Ch. 13 - Cost-plus, target pricing, working backward....Ch. 13 - Life-cycle budgeting and costing. Arnold...Ch. 13 - Considerations other than cost in pricing...Ch. 13 - Cost-plus, target pricing, working backward. The...Ch. 13 - Value engineering, target pricing, and target...Ch. 13 - Target service costs, value engineering,...Ch. 13 - Cost-plus, target return on investment pricing....Ch. 13 - Cost-plus, time and materials, ethics. C S...Ch. 13 - Cost-plus and market-based pricing. Georgia Temps,...Ch. 13 - Cost-plus and market-based pricing. (CMA, adapted)...Ch. 13 - Life-cycle costing. Maximum Metal Recycling and...Ch. 13 - Airline pricing, considerations other than cost in...Ch. 13 - Prob. 13.35PCh. 13 - Ethics and pricing. Instyle Interior Designs has...Ch. 13 - Value engineering, target pricing, and locked-in...
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Revenue Recognition and Ethics. The following article was published in Newsday on February 9, 2009:Call for Probe of Ticket SalesBruce Springsteen fans were victims of a “classic bait and switch” scam by the nation’slargest concert ticket seller, Senator Charles Schumer said yesterday, as he called for afederal investigation into the company, Ticketmaster. Schumer wants the Federal TradeCommission to look into whether the Ticketmaster website withheld the best tickets from thepublic and then shuttled fans to TicketsNow, a fully owned subsidiary. TicketsNow had thebest seats available immediately—at sky-high prices—after Springsteen tickets went on salesat 10 A.M. on February 2.A federal investigation would look into whether Ticketmaster was instantly scalping the tickets,never giving fans a chance to buy them at face value, Schumer said. Customers who tried tobuy tickets originally priced at $95 on Ticketmaster’s website were directed to TicketsNowwhere they were priced at more than…arrow_forwardunder the FCA term , a Indian customer ordered a batch of electronic watch from Chinese watchmaker, the seller deliver the goods on schedule to Guangzhou Baiyun airport, airlines to harvest and issue the air waybill, the seller notify the buyer payment, but the watch market prices, the buyer said he has not officially receiving, let the seller take back goods, refused to pay. ASK: is buyer's view reasonable?arrow_forwardThe Boeing Company, manufacturer of jet aircraft, is the defendant in numerous lawsuits claiming unfair trade practices. Boeing has strong incentives not to disclose these contingent liabilities. However, financial accounting standards require that companies report their contingent liabilities. Required: a. Why would a company prefer not to disclose its contingent liabilities? b. Describe how a bank could be harmed if a company seeking a loan did not disclose its contingent liabilities. c. What is the ethical tightrope that each company must walk when it reports its contingent liabilities?arrow_forward
- Revenue Recognition and Ethics. The following article was published in Newsday on February 9, 2009:Call for Probe of Ticket SalesBruce Springsteen fans were victims of a “classic bait and switch” scam by the nation’s largest concert ticket seller, Senator Charles Schumer said yesterday, as he called for a federal investigation into the company, Ticketmaster. Schumer wants the Federal Trade Commission to look into whether the Ticketmaster website withheld the best tickets from thepublic and then shuttled fans to TicketsNow, a fully owned subsidiary. TicketsNow had the best seats available immediately—at sky-high prices—after Springsteen tickets went on sales at 10 A.M. on February 2.A federal investigation would look into whether Ticketmaster was instantly scalping the tickets, never giving fans a chance to buy them at face value, Schumer said. Customers who tried to buy tickets originally priced at $95 on Ticketmaster’s website were directed to Tickets Now where they were priced at…arrow_forwardThe COVID-19 pandemic has affected one of your customers, NEST Ltd adversely. Even though the economies are fast recovering, they have contacted your company to request to purchase on credit instead of cash on delivery. Your boss, Alan, the Marketing Manager has instructed you to review their request. He has asked you to review NEST Ltd’s latest set of financial statements. (a)Identify the key financial statements. Explain how the information reported in these statements will help you to decide whether to accede to NEST Ltd’s request.arrow_forwardA purchasing agent for a large hardware retailer hassole discretion in selecting vendors for the parts and supplies sold by the company. The agent directs a disproportionate number of purchase orders to a supply company owned by the agent’s brother- in-law, which charges above-market prices for its products. The agent’s relationship with the supplier is unknown to his employer. What type of Fraud is this? What controls can be implemented to prevent and detect this fraud?arrow_forward
- Sadaf Oman Co. is using internal control procedures to mitigate the risks to which it is exposed. Listed below are some internal control procedures applicable to Sadaf Oman Co's revenues and receivable system. Match the most appropriate one of the following risks mitigated to the correct internal control procedure stated below. Risks mitigated: (A) Sales staff misappropriate sales receipts then write off bad debts in the general ledger (B) Sales are made to customers who cannot pay (C) Sales are not made to existing customers (D) Sales staff do not communicate with the accounts staff regularly, so the debt uncollected at the end of the period are written off in the ledger by the accounts staff (E) Customer refuses to pay for goods allegedly not received (F) Customer orders are not being fulfilled. (G) Revenues on books are overstated and exceed actual revenues in bank (H) Posting a sale that is beyond the credit limit of the customers ) Company employees steal collections (U) Without…arrow_forwardMr. Salim is the owner of an audit firm who audit the financial statements of the companies by charging fee. Lulu hypermarket is one of their old clients. Last month lulu hypermarket distributed discount coupon to their customers and it was a coincident that external auditors were also there, and they also got some coupons. Which of the following threat do you think can arise in this situation? a. Familiarity threat b. None of the options c. Self-interest threat d. Self-review threatarrow_forwardGive typing answer with explanation and conclusion During the COVID-19 pandemic, small businesses were much more resilient than larger businesses, resulting in the federal government offering loan guarantees and payroll protection for larger businesses predominately. Group startsTrue or FalseTrue, unselectedFalse, selectedarrow_forward
- Alternative Trading System is a trading destination that does not publicly display any of their orders or quotes to the public. Their order book is completely hidden to the marketplace. True Falsearrow_forwardDeciding to trade in financial products because of access to non-material non-public information. A.Would ve regarded as engaging in information-based manipulation. B.Is unacceptable conduct as it will breach CFA standards. C.Would likely be a breach of the Corporations Act in Australia. D.Is a acceptable as it would be consistent with the use of mosaic theory. In accordance with CFA standard I(B) members must: A.May accept gifts or bonuses from clients while exercising professional judgement to ensure independence and objectivity is not threatened. B.Always accept gifts or bonuses from clients. C.Never accept gifts or bonuses from clients. D.Accept gifts not only if it is in the member of employ’s interest to do so.arrow_forwardConsumer credit laws have been implemented over the years to protect consumers against creditor abuses. Match the following consumer credit issues with the appropriate consumer credit law: a. Controls debt collection procedures and practice. b. Prohibits credit discrimination because of race, age, or national origin. c. Establishes the APR and requires the disclosure of all credit-related costs. d. Requires credit contracts to be written in plain English. e. Requires a "rejection letter" or written explanation of any adverse action taken. f. Limits marketing of credit cards to the mailing of application packets and prohibits the mailing of unrequested credit cards. g. Allows payment for defective goods purchased with a credit card to be legally withheld. h. Limits fraudulent card use to $50 payment by the cardholder. i. Ensures that divorced individuals can receive credit. j. Provides annual access to one free credit report from each of the major credit bureaus. k. Reduces credit…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Auditing: A Risk Based-Approach (MindTap Course L...AccountingISBN:9781337619455Author:Karla M Johnstone, Audrey A. Gramling, Larry E. RittenbergPublisher:Cengage Learning
Auditing: A Risk Based-Approach (MindTap Course L...
Accounting
ISBN:9781337619455
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:Cengage Learning