Exam 18: Pricing and Profitability Analysis

Market structure affects price as well as the costs necessary to support that price.

The Crested Butte Company recorded the following data for a product line:

Kasawaki Company incurred the following costs in manufacturing digital cameras: During the period, the company produced and sold 1,000 units. What is the inventory cost per unit using absorption costing?

The contribution margin variance is favorable if the budgeted contribution margin is less than the:

The sales mix variance tells managers what impact a difference between actual and expected percentages of products sold has on:

The Levinson Company expected to produce 23,000 units at $190 per unit. The 2016 actual figures were 22,100 units which sold at $200 each. Compute: a. The Sales Price Variance b. The Sales Volume Variance c. The Overall (total) Sales Variance Indicate whether Favorable or Unfavorable

Predatory pricing and dumping are outlawed practices that set prices below cost intending to injure competitors.

The majority of the product cost is "locked in" during which of the following life-cycle stages?

According to Hansen and Mowen, which of the following product life cycle stages comes first?

Which of the following markets is characterized by the following: only a few firms in the industry, a fairly unique product, difficult entry into the industry, and spending for differentiation of the product?

The two factors that influence the ability of companies to adjust price are price elasticity and __________ structure.

The contribution margin variance is the difference between the actual contribution margin and the:

Octagonal Company has the following information for 2016: Selling price $150 per unit Variable production costs $40 per unit produced Variable selling and admin. expenses $16 per unit sold Fixed production costs $200,000 Fixed selling and admin. expenses $140,000 Units produced 10,000 units Units sold 8,000 units There were no beginning inventories. What is the cost of ending inventory for Octagonal using the variable costing method?

Another term for predatory pricing in the international market is .

The budgeted quantity sold of a product is 200 units. The actual quantity sold is 100 units. The budgeted average unit contribution margin is $3.00. What is the contribution margin volume variance?

The percent change in quantity demanded for a given percent change in price is called price __________ .

Which of the following product life cycle stages has revenues for the entire industry decreasing?

Figure 18-1 The Lancashire Corporation manufactures bottled water with an average manufacturing cost of $2 per case (a case contains 24 bottles). Bayview sold 1,000,000 cases last year to the following types of customers: The drugstore chains have special handling costs of $0.20 a case and increased administrative assistance costing $45,000 per year. The gas station chains require special marketing promotions that cost $50,000. Sales commissions of 10% are paid. The supermarket chains order electronically through EDI which costs $25,000 annually. Bayview is responsible for shipping costs, which totaled $0.50 a case and special labels costing $0.02 per bottle Local pharmacies have special handling costs of $0.10 per case and sales commissions are paid to agents costing $0.25 per case. Bad debt expense averages 10% of sales. -Refer to Figure 18-1. What is the total cost per case for drugstore chains?

The legal system supports business competition by allowing an open policy on pricing.