Question :
21. Walters Inc. power washes commercial and residential buildings. The company : 1295710
21. Walters Inc. power washes commercial and residential buildings. The company is preparing to bid on a competitive job involving a large commercial building. Walters estimates that the job will have the following costs:
Direct materials
$500
Direct labor
1,500
Overhead
400
Selling and administrative costs
200
Walters would like to earn a $1,600 profit on the job. The company applies a markup on cost of goods sold to arrive at an initial bid price. Refer to the Walters Inc. information above. What is the markup percentage on the above job? A. 38%B. 62%C. 75%D. 150%
22. Walters Inc. power washes commercial and residential buildings. The company is preparing to bid on a competitive job involving a large commercial building. Walters estimates that the job will have the following costs:
Direct materials
$500
Direct labor
1,500
Overhead
400
Selling and administrative costs
200
Walters would like to earn a $1,600 profit on the job. The company applies a markup on cost of goods sold to arrive at an initial bid price. Refer to the Walters Inc. information above. What should be Walters initial bid? A. $4,550B. $3,600C. $4,000D. $4,200
23. Which of the following pricing strategies is used most often in service industries in which labor is the primary cost incurred? A. Time and material pricingB. Cost-plus pricingC. Target pricingD. Value pricing
24. Jones and Martin Consulting Inc. charges its clients a fee equal to 15 percent of the cost savings that result from the consulting services they provide. Jones and Martin is most likely using: A. time and material pricing.B. target pricing.C. value pricing.D. predatory pricing.
25. When a company prices a new product at a low initial price but still above cost to build market share or to quickly establish a customer base, they are most likely using: A. target pricing.B. price skimming.C. predatory pricing.D. penetration pricing.
26. When a company prices a new product at an extremely low price, often below cost, for the purpose of injuring or eliminating competitors, they are most likely using: A. target pricing.B. price skimming.C. predatory pricing.D. penetration pricing.
27. Immediately after a recent hurricane off the coast of Florida, some companies doubled the normal price for plywood. Companies that do this are often accused of: A. predatory pricing.B. price skimming.C. price gouging.D. value pricing.
28. Which of the following types of pricing strategies is most likely to be considered illegal? A. Target pricingB. Penetration pricingC. Price skimmingD. Predatory pricing
29. Which of the following statements about the value chain is false? A. It is the set of activities that increase the value of an organizations’ products and services.B. It includes activities that are performed within but not outside of an organization.C. It may include upstream costs such as research, development, and engineering costs.D. It may include downstream costs such as advertising and shipping costs.
30. Fundamental decisions concerning the basic size and scope of an organization’s operations are often classified as: A. organizational activities.B. operational activities.C. structural activities.D. value chain activities.
