Question 4

Which of the following is true of long-run pricing?

1) It is fixed at a level that recovers the variable cost of the company and a pre-determined profit markup.

2) It is generally a function of the market factors and the cost involved in production is generally not a consideration.

3) It is a strategic decision designed to build long-run relationships with customers based on stable and predictable prices.

4) It is based only on internal requirements like cost and estimated rate of return as in the long run these requirements are the driving factors of any organization.

Question 9

Making design decisions is an example of managing costs:

1) during planning phase; before they are incurred but are "locked in"

2) during the production phase; when they are incurred

3) after the production phase; after they are locked in

4) after they are committed to during the budgeting phase