1. Differential profit indicates that a decision is expected to decrease income.

Select one:

True

False

2. Differential analysis can be used to decide whether to make or buy a part. Select one:

True

False

3.The normal selling price is equal to the cost amount per unit minus markup.

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True

False

4. In setting up a product normal selling price, only the cost of manufacturing the product (product costs) are included in the cost per unit.

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True

False

5. The first step in setting up a product selling price is determining the markup percentage.

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True

False

6. A differential analysis always shows that it is best to discontinue a non-performing business segment.

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True

False

7. In setting up normal selling price for a product, estimated selling expenses, administrative expenses, and desired profit are included in the markup.

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True

False

8. According to the demand-based concept, if there is high demand for the product, then the price is set low.

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True

False

9. According to the demand-based concept, if there is low demand for the product, then the price is set low.

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True

False

10. When a company sets its prices according to the price offered by competitors, it is using the demand-based concept.

Select one:

True

False