Question
Indicate whether each statement is true (T) or false (F). (T) 1. The three major influences on pricing decisions are customers, competitors, and costs. (F)
Indicate whether each statement is true (T) or false (F). (T) 1. The three major influences on pricing decisions are customers, competitors, and costs. (F) 2. A company should accept a one-time only special order when the orders total Contribution margin is positive. (F) 3. Value engineering is usually constrained by locked-in costs. (F) 4. The target rate of return on investment for a product is the same as the products markup as a percentage of its full unit cost. (T) 5. The cost of preparing an owners manual and including it in each product package is a value-added cost. ___ 6. One reason managers use the full cost of products as the cost base in their pricing decisions is to promote price stability. ___ 7. Life-cycle costing highlights manufacturing costs more than the costs of other business functions in the value chain. ___ 8. When there is price discrimination, pricing is not linked closely to the cost of the product. ___ 9. Under the U.S. Robinson-Patman Act, a manufacturing company cannot price discriminate between two customers if its intent is to lessen or prevent competition. ___ 10. Setting prices above average variable costs is regarded as pricing that is non predatory. ___ 11. Collusive pricing occurs when a nonU.S. Company sells a product in the U.S. at a price below the market value in the country where it is produced, and this lower price materially injures or threatens to materially injure an industry in the U.S.
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