Answer the following questions using the information below: Bondi Corporation budgeted the following costs for the production of its unicycle for 2017. \[\begin{array} { l r } \text { Direct materials } & \$ 562500 \\ \text { Direct labour } & 390000 \\ \text { Manufacturing overhead } & \\ \text { Variable } & 420000 \\ \text { Fixed } & 322500 \\ \text { Selling and administrative } & \\ \text { Variable } & 180000 \\ \text { Fixed } & \underline{ 240000} \\ \text { Total costs } & \underline{ \$ 2115000} \end{array}\] Bondi has an annual target operating profit of $450 000. -The mark-up percentage for setting prices as a percentage of the full cost of the product is:

A) 328% B) 228% C) 36% D) 21% A) 328% B) 228% C) 36% D) 21%

Margaret River Company has budgeted sales of $750 000 with the following budgeted costs: \[\begin{array} { l r } \text { Direct materials } & \$ 168000 \\ \text { Direct manufacturing labour } & 132000 \\ \text { Factory overhead } & \\ \quad \text { Variable } & 96000 \\ \quad \text { Fixed } & 108000 \\ \text { Selling and administrative expenses } & \\ \quad \text { Variable } & 72000 \\ \quad \text { Fixed } & 100000 \end{array}\] Compute the average mark-up percentage for setting prices as a percentage of: a.Total manufacturing costs b.The variable cost of the product c.The full cost of the product d.Variable manufacturing costs _____________________________________________________________________________________________ _____________________________________________________________________________________________

a.$168 000 + $132 000 + $96 000 + $108 0

Exam 9: Pricing and Customer Profitability

A ________ formula for pricing does not require a detailed analysis of cost behaviour patterns to separate costs into fixed and variable components for each product.

(Multiple Choice)

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Question 81

Which of the following is NOT allowed in Australia?

(Multiple Choice)

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Question 82

What factors may influence the level of mark-ups? _ _

(Essay)

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Question 83

If a company decides not to allocate some or all corporate,division or channel costs,it results in total company profitability being less than the sum of the profitability of individual:

(Multiple Choice)

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Question 84

A full-cost formula for pricing requires a detailed analysis of cost behaviour patterns to separate costs into fixed and variable components for each product.

(True/False)

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Question 85

If deciding whether to eliminate a distribution channel,allocating organisation-sustaining costs to distribution channels:

(Multiple Choice)

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Question 86

For pricing decisions,full product costs:

(Multiple Choice)

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Question 87

To improve customer profitability,companies should track:

(Multiple Choice)

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Question 88

Customer revenues are one element of customer profitability.The other,equally important,element is the cost of acquiring,serving and retaining ________.

(Multiple Choice)

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Question 89

Price dumping occurs when a domestic company is trying to get rid of out-of-style products at a substantially reduced price.

(True/False)

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Question 90

Managers should be cautious about discontinuing customers.

(True/False)

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Question 91

Answer the following questions using the information below: Bondi Corporation budgeted the following costs for the production of its unicycle for 2017. Direct materials \ 562500 Direct labour 390000 Manufacturing overhead Variable 420000 Fixed 322500 Selling and administrative Variable 180000 Fixed Total costs Bondi has an annual target operating profit of $450 000. -The mark-up percentage for setting prices as a percentage of the full cost of the product is:

(Multiple Choice)

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Question 92

Customers are more valuable when they are all of the following EXCEPT:

(Multiple Choice)

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Question 93

Allocating all corporate costs motivates division managers to examine how corporate costs are planned and controlled.

(True/False)

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Question 94

Which of the following is relevant when managing customer profitability?

(Multiple Choice)

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Question 95

Margaret River Company has budgeted sales of $750 000 with the following budgeted costs: Direct materials \ 168000 Direct manufacturing labour 132000 Factory overhead Variable 96000 Fixed 108000 Selling and administrative expenses Variable 72000 Fixed 100000 Compute the average mark-up percentage for setting prices as a percentage of: a.Total manufacturing costs b.The variable cost of the product c.The full cost of the product d.Variable manufacturing costs _ _

(Essay)

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(85)

Question 96

Advantages of using the full cost of the product as the cost base include all of the following EXCEPT that:

(Multiple Choice)

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Question 97

The cost of the manager of a retail distribution channel would MOST likely be classified as a:

(Multiple Choice)

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Question 98

Which of the following activities support individual customers,irrespective of the number of units or batches delivered to the customer?

(Multiple Choice)

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Question 99

Determining the ________ cost of each activity and product is not straightforward.

(Multiple Choice)

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Question 100

A ________ formula for pricing does not require a detailed analysis of cost behaviour patterns to separate costs into fixed and variable components for each product.

Which of the following is NOT allowed in Australia?

What factors may influence the level of mark-ups? _ _

If a company decides not to allocate some or all corporate,division or channel costs,it results in total company profitability being less than the sum of the profitability of individual:

A full-cost formula for pricing requires a detailed analysis of cost behaviour patterns to separate costs into fixed and variable components for each product.

If deciding whether to eliminate a distribution channel,allocating organisation-sustaining costs to distribution channels:

For pricing decisions,full product costs:

To improve customer profitability,companies should track:

Customer revenues are one element of customer profitability.The other,equally important,element is the cost of acquiring,serving and retaining ________.

Price dumping occurs when a domestic company is trying to get rid of out-of-style products at a substantially reduced price.

Managers should be cautious about discontinuing customers.

Customers are more valuable when they are all of the following EXCEPT:

Allocating all corporate costs motivates division managers to examine how corporate costs are planned and controlled.

Which of the following is relevant when managing customer profitability?

Advantages of using the full cost of the product as the cost base include all of the following EXCEPT that:

The cost of the manager of a retail distribution channel would MOST likely be classified as a:

Which of the following activities support individual customers,irrespective of the number of units or batches delivered to the customer?

Determining the ________ cost of each activity and product is not straightforward.

Management Accounting in Context

Different Costs for Different Purposes

Determining How Costs Behave

Costvolumeprofit Analysis

Estimating the Cost of Producing Services

Estimating the Costs of Products and Inventory

Target Costing, Managing Activities and Managing Capacity

Activity-Based Management and Activity-Based Costing

Decision Making and Relevant Information

Budgeting, Management Control and Responsibility Accounting

Flexible Budgets, Direct Cost Variances and Management Control

Flexible Budgets, Overhead Cost Variances and Management Control

Allocation of Support-Department Costs, Common Costs and Revenues

Strategy Formation, Strategic Control and the Balanced Scorecard

Quality, Time and the Balanced Scorecard

Inventory Management, Just-In-Time and Simplified Costing Methods

Capital Budgeting and Cost Analysis

Management Control Systems, Transfer Pricing and Multinational Considerations

Performance Measurement, Compensation and Multinational Considerations

Measuring and Reporting Sustainability

Filters

Exam 9: Pricing and Customer Profitability

A ________ formula for pricing does not require a detailed analysis of cost behaviour patterns to separate costs into fixed and variable components for each product.

Which of the following is NOT allowed in Australia?

What factors may influence the level of mark-ups? _____________________________________________________________________________________________ _____________________________________________________________________________________________

If a company decides not to allocate some or all corporate,division or channel costs,it results in total company profitability being less than the sum of the profitability of individual:

A full-cost formula for pricing requires a detailed analysis of cost behaviour patterns to separate costs into fixed and variable components for each product.

If deciding whether to eliminate a distribution channel,allocating organisation-sustaining costs to distribution channels:

For pricing decisions,full product costs:

To improve customer profitability,companies should track:

Customer revenues are one element of customer profitability.The other,equally important,element is the cost of acquiring,serving and retaining ________.

Price dumping occurs when a domestic company is trying to get rid of out-of-style products at a substantially reduced price.

Managers should be cautious about discontinuing customers.

Customers are more valuable when they are all of the following EXCEPT:

Allocating all corporate costs motivates division managers to examine how corporate costs are planned and controlled.

Which of the following is relevant when managing customer profitability?

Advantages of using the full cost of the product as the cost base include all of the following EXCEPT that:

The cost of the manager of a retail distribution channel would MOST likely be classified as a:

Which of the following activities support individual customers,irrespective of the number of units or batches delivered to the customer?

Determining the ________ cost of each activity and product is not straightforward.

Management Accounting in Context

Different Costs for Different Purposes

Determining How Costs Behave

Costvolumeprofit Analysis

Estimating the Cost of Producing Services

Estimating the Costs of Products and Inventory

Target Costing, Managing Activities and Managing Capacity

Activity-Based Management and Activity-Based Costing

Decision Making and Relevant Information

Budgeting, Management Control and Responsibility Accounting

Flexible Budgets, Direct Cost Variances and Management Control

Flexible Budgets, Overhead Cost Variances and Management Control

Allocation of Support-Department Costs, Common Costs and Revenues

Strategy Formation, Strategic Control and the Balanced Scorecard

Quality, Time and the Balanced Scorecard

Inventory Management, Just-In-Time and Simplified Costing Methods

Capital Budgeting and Cost Analysis

Management Control Systems, Transfer Pricing and Multinational Considerations

Performance Measurement, Compensation and Multinational Considerations

Measuring and Reporting Sustainability

Filters

What factors may influence the level of mark-ups? _ _