DeVry Chicago ACCT 434 Week 5 Pricing Decisions Management Control Systems

DeVry Chicago ACCT 434 Week 5 Pricing Decisions Management Control Systems

1. Question : (TCO 7) Major influences of competitors, costs, and customers on pricing decisions are factors ofsupply and demand.activity-based costing and activity-based management.key management themes that are important to managers attaining success in their planning and control decisions. the value-chain concept.2. Question : (TCO 7) The first step in implementing target pricing and target costing ischoosing a target price.determining a target cost.developing a product that satisfies needs of potential customers. performing value engineering.3. Question : (TCO 7) The markup percentage is usually higher if the cost base used isthe full cost of the product.the variable cost of the product.variable manufacturing costs.total manufacturing costs.4. Question : (TCO 7) An understanding of life-cycle costs can lead toadditional costs during the manufacturing cycle.less need for evaluation of the competition.cost-effective product designs that are easier to service.mutually beneficial relationships between buyers and sellers.5. Question : (TCO 7) Pritchard Company manufactures a product that has a variable cost of $30 per unit. Fixed costs total $1,500,000, allocated on the basis of the number of units produced. Selling price is computed by adding a 20% markup to full cost. How much should the selling price be per unit for 300,000 units?$49.$43.75.$42.$35.6. Question : (TCO 8) A product may be passed from one subunit to another subunit in the same organization. The product is known asan interdepartmental product.an intermediate product.a subunit product.a transfer product.7. Question : (TCO 8) Transfer prices should be judged by whether they promotegoal congruence.the balanced scorecard method.a high level of subunit autonomy in decision making.Both 1 and 2 are correct.8. Question : (TCO 8) When an industry has excess capacity, market prices may drop well below their historical average. If this drop is temporary, it is calleddistress prices.dropped prices.low-average prices.substitute prices.9. Question : (TCO 8) An advantage of using budgeted costs for transfer pricing among divisions is thatit promotes subunit autonomy.the divisions know the transfer price in advance.it usually provides a basis for optimal decision making.overall corporate profitability is usually higher.10. Question : (TCO 8) The seller of Product A has no idle capacity and can sell all it can produce at $20 per unit. Outlay cost is $4. What is the opportunity cost, assuming the seller sells internally?$4$16$20$24


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