ACCT 434 Week 5 DQ 2 (Workout Room)

Week 5 Quiz 1

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

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?

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?