ACCT 434 Week 5 Quiz 1, Pricing Decision Management Control Systems

ACCT 434 Week 5 Quiz 1, Pricing Decision Management Control Systems

1. (TCO 7) Major influences of competitors, costs, and customers on pricing decisions are factors of

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2. (TCO 7) The first step in implementing target pricing and target costing is

3. (TCO 7) The markup percentage is usually higher if the cost base used is

4. (TCO 7) An understanding of life-cycle costs can lead to

5. (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?

6. (TCO 8) A product may be passed from one subunit to another subunit in the same organization. The product is known as

7. (TCO 8) Transfer prices should be judged by whether they promote

8. (TCO 8) When an industry has excess capacity, market prices may drop well below their historical average. If this drop is temporary, it is called

9. (TCO 8) An advantage of using budgeted costs for transfer pricing among divisions is that

10. (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?

ACCT 434 Week 5 Quiz 2

1. (TCO 7) When companies do not want to use market prices or find it too costly, they typically use __________ prices, even though suboptimal decisions may occur.

2. (TCO 7) The first step in implementing target pricing and target costing is

3. (TCO 7) The amount of markup percentage is usually higher if

4. (TCO 7) An understanding of life-cycle costs can lead to

5. (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?

6. (TCO 8) A benefit of using a market-based transfer price is

7. (TCO 8) A transfer-pricing method leads to goal congruence when managers

8. (TCO 8) When an industry has excess capacity, market prices may drop well below their historical average. If this drop is temporary, it is called

9. (TCO 8) An advantage of using budgeted costs for transfer pricing among divisions is that

10. (TCO 8) Division A sells soybean paste internally to Division B, which in turn, produces soybean burgers that sell for $5 per pound. Division A incurs costs of $0.75 per pound while Division B incurs additional costs of $2.50 per pound. Which of the following formulas correctly reflects the company’s operating income per pound?

ACCT 434 Week 5 Quiz 3

1. Related to Problem 1, compute the average markup percentage for setting prices as a percentage of the full cost of the product.

2. Related to Problem 1, compute the average markup percentage for setting prices as a percentage of the variable cost of the product.

3. Related to Problem 1, compute the average markup percentage for setting prices as a percentage of the variable manufacturing costs.

4. Related to Problem 2, compute the operating income for the olive oil division using a transfer price of $4.

5. Related to Problem 2, compute the operating income for the olive oil division using a transfer price of $2.14.

6. Related to Problem 2, what transfer price(s) do you recommend? Compute the operating income for the olive oil division using your recommendation.