Question 19

The pricing strategy in which companies first determine the price at which they can sell a new product and then design a product that can be produced at a low enough cost to provide adequate operating income is referred to as

Group of answer choices

cost-plus pricing, or cost-based approach

market-based approach

loss leading strategy

short-run pricing

Question 20

Answer questions 20-22 using the following information:

Travis Inc. and Vesser Inc. are two small clothing companies that are considering leasing a dyeing machine together. If each company rents the machine on its own, it will cost $63,000 for Travis and $45,500 for Vesser. If they rent the machine together, the fee will decrease to $93,000.

If the stand-alone method were used, what amount of cost would be allocated to Travis Inc.?

Group of answer choices

$54,000

$45,500

$47,500

$63,000

Question 21

If the incremental method were used, what amount of cost would be allocated to Travis Inc.? Assume Travis is ranked as the primary user.

Group of answer choices

$37,750

$45,500

$63,000

$47,500

Question 22

If the Shapley value method were used, what amount of cost would be allocated to Travis Inc.?

Group of answer choices

$55,250

$46,500

$54,250

$54,000

Question 23

Most of a products life-cycle costs are locked in by decisions made during the business function of the value chain.

Group of answer choices

manufacturing

design

marketing

customer service