Exam 16: Pricing and Credit Decisions

Variable pricing strategy occurs where a business sets and advertises a fixed price but gives a discount for reasons such as the customer's amount purchased.

Diamonds and other jewels often carry a high price to convey an image of high quality or uniqueness.This type of pricing is known as

Under certain circumstances,local,state,and federal laws must be considered in setting prices in a small business.

Match the term with its definition.Some terms may not be used. a.Aging schedule b.Average pricing c.Bad-debt ratio d.Break-even analysis e.Break-even point f.Contribution margin g.Elastic demand h.Elasticity of demand i.Inelastic demand j.Value -The degree to which a change in price affects the quantity demanded

In general,products that are consumed in fixed amounts have

Services are generally easier to price than products.

Buying on credit ____ the amount of working capital needed by the business doing the buying.

Information Express is a privately owned and operated organization that collects credit information on business firms.After the organization analyzes and evaluates the data,it makes credit ratings available to client companies for a fee.Information Express is a

Fine Framings,a small framing shop,uses markup pricing to arrive at a final selling price.The firm sells its frames at a price of $25,given a $15 unit cost.Fine Framings' markup on the selling price is ____,and its markup on cost is ____.

Match the term with its definition.Some terms may not be used. a.Product line pricing b.Average pricing c.Follow-the-leader pricing d.Markup pricing e.Freemium strategy f.Prestige pricing g.Price lining strategy h.Price i.Skimming price strategy j.Value k.Variable pricing strategy -A specification of what a seller requires in exchange for transferring ownership or use of a product or service

The bad-debt ratio is the ratio of bad debts to total sales.

Average pricing is an appropriate pricing approach for small businesses because the method takes into consideration both fixed and variable costs.

Match the term with its definition.Some terms may not be used. a.Product line pricing b.Average pricing c.Follow-the-leader pricing d.Markup pricing e.Freemium strategy f.Prestige pricing g.Price lining strategy h.Price i.Skimming price strategy j.Value k.Variable pricing strategy -A technique that sets very high prices for a limited period before reducing them to more competitive levels

Lorrie Veasey,owner of All That Swag,used discount coupons for special event items to drive customers to her retail stores.Using such promotions and stating that "the regular price is never chiseled in stone" would indicate Lorrie is using a

Slow-paying credit accounts

Dennis has made a purchase of $50,000 using trade credit with terms of 2/10 net 30.How much discount will a he receive if the buyer pays the bill on the net due date?

The difference between the unit selling price and the unit variable costs and expenses is known as the

Active Feet,a small manufacturer of shoes,hired an additional vice-president and purchased a barrel of synthetic rubber used to make shoe soles.These two expenses should be considered a(n)____ and a(n)____,respectively.

Marketing expenses,factory equipment costs,and salaries of office personnel are considered variable costs.

Hillary wants to purchase a refrigerator on credit.If she uses an installment plan,what is most likely to occur?