1. Which of the following statements is not true?

a. Many companies base prices on cost while other companies use target-costing strategies.

b. Cost-based pricing involves the calculated product cost plus the desired profit.

c. The overall sales variance is the sum of the contribution margin and the sales price variance.

d. Target costing sets costs based on the price that customers are willing to pay.

2. New England businesses were trying to sell lumber for 50 percent above their regular prices right after 2011 hurricane Irene hit. This is an example of:

a. predatory prices.

b. price gouging.

c. price discrimination.

d. penetration pricing.

3. Taylor Company's budgeted sales were 10,000 units at $200 per unit. Actual sales were 9,200 units at $210 per unit.

Taylor's sales price variance is

a. $92,000 (F).

b. $100,000 (U).

c. $92,000 (U).

d. $100,000 (F).