1. In a competitive environment, the company must set a target cost and a target selling price. True or false.

2. The cost-plus pricing approach establishes a cost base and adds a markup to this base to determine a target selling price. True or false.

3. Sales volume plays a large role in determining per unit costs in the cost-plus pricing approach. True or false.

4. In time-and-material pricing, the material charge is based on the cost of direct materials used and a material loading charge for related overhead costs. True or False.

5. A negotiated transfer price should be used when an outside market for the goods does not exist. True or false.

6. The absoprtion-cost approach is consistent with generally accepted accounting principles because it defines the cost base as the manufacturing cost. True or false.