Question :
MULTIPLE CHOICE.
Choose the one alternative that best completes the statement : 1196074
MULTIPLE CHOICE.
Choose the one alternative that best completes the statement or answers the question. 21)
The three major influences on pricing decisions are 21)
______ A)
competition, demand, and production efficiency. B)
variable costs, fixed costs, and mixed costs. C)
competition, costs, and customers. D)
continuous improvement, customer satisfaction, and a dual internal/external focus. E)
none of the above
22)
Economic theory suggests that companies should produce and sell units until the ________ revenue equals the ________. 22)
______ A)
marginal; marginal B)
marginal; fixed C)
total; fixed D)
total; marginal E)
total;
total
23)
Pricing for one-time-only special orders is typically, 23)
______ A)
higher in variable costs than usual. B)
a pricing decision using the time horizon. C)
a short-run decision. D)
a long-run decision. E)
based on fixed costs alone.
24)
A price-bidding decision for a one-time-only special order includes an analysis of 24)
______ A)
all cost drivers B)
indirect costs of each category in the value chain. C)
only fixed manufacturing costs. D)
only marketing costs. E)
all costs of each function in the value chain.
25)
Decisions on the price to bid on a one-time-only special order should include 25)
______ A)
cost data, potential bids of competitors, and use of variable costing income statements. B)
only cost data. C)
cost data and potential bids of competitors. D)
only the potential bids of competitors. E)
existing fixed manufacturing overhead.
26)
For long-run pricing decisions, using stable prices has the advantage of 26)
______ A)
reducing competition. B)
reducing the need to change cost structures frequently. C)
helping build buyer-seller relationships. D)
increasing margins. E)
minimizing the need to monitor competitors’ prices frequently.
Use the information below to answer the following question(s).
Action Mopeds manufactures mopeds. The following information pertains to the company’s normal operations per month:
Output units15,000 mopeds
Machine-hours4,000 hours
Direct manufacturing labour hours5,000 hours
Direct manufacturing labour per hour$24
Direct materials per unit$200
Variable manufacturing overhead costs$ 322,500
Fixed manufacturing overhead costs$1,200,000
Marketing and distribution costs$1,125,000
Research and development costs$ 900,000
27)
What is the unit cost when establishing a long-run price for mopeds? 27)
______ A)
$470.00 B)
$309.50 C)
$444.50 D)
$460.50 E)
$325.48
28)
What is the unit cost for establishing a minimum bid on a one-time-only special order of 1,000 units from an overseas city if all cost relationships remain the same except for a one-time setup charge of $40,000? 28)
______ A)
$260.50 B)
$444.50 C)
$209.50 D)
$269.50 E)
$309.50
29)
Taylor Stadium is evaluating ticket prices for its baseball games. Studies have shown that Monday and Tuesday ballgames average less than half the fans of games on other days. The following information pertains to the stadium’s normal operations per season.
Average fans per game5,000 fans
Average fans per Monday/Tuesday game2,000 fans
Stadium operating hours per season300 hours
Stadium capacity7,000 seats
Variable operating costs per hour$ 2,000
Fixed overhead costs per year for all events$450,000
Marketing costs per season for baseball$212,500
Customer service costs per season for baseball$ 25,000
The stadium is open for 5 hours on each day a game is played. The stadium is available for some type of use 300 days a year. All employees work by the hour except for the administrators. In addition, only one game is played per day and each fan would have only one ticket per game.
What is the unit cost when establishing a long-run price for ballgames assuming all tickets are priced the same? 29)
______ A)
$91.00 B)
$85.73 C)
$2.20 D)
$4.30 E)
$3.09
30)
Which of the following is TRUE of Alternative Long-run pricing approaches? 30)
______ A)
a market-based approach only considers how customers will react B)
a cost-based approach only considers how customers will react C)
a market-based approach only considers costs D)
in cost-plus pricing, selling price ignores market forces when setting the markup E)
a market-based approach is more logical in a competitive market
