Reach the Summit, Inc. is planning to open a new rock climbing facility in Athens. Summit will generate revenue by selling monthly memberships that give climbers unlimited access to the facility. Summit can only charge $75 per month per climber because of competition from another facility in the area. The variable cost per climber is expected to be $15 per month. Based on the information given, which of the following statement is definitely true? OOOOO Summit is a price-taker. Summit's target cost per member would equal $75 plus the desired profit per member. The amount charged for a monthly membership would be higher if Summit used the total cost concept rather than the variable cost concept. Summit would have used cost-plus pricing to calculate the $75. Summit is in a demand-based market. Which of the following is not an assumption made in cost-volume-profit analysis? The sales mix is constant. Total sales and costs are linear. Inventory quantities are the same at the beginning and end of the period. Cost assumptions are valid across the relevant range. Costs can be divided into mixed and variable costs. Which of the following statement concerning budget preparation is correct? OOOOO The preparation of the production budget is the starting point in the budgeting process for manufacturers. If a participative approach is used to prepare budgets, only top management is involved in the budgeting process. Static budgets are prepared for multiple activity levels. Participative budgeting minimizes the risk that employees will create budgetary slack. A zero-based budgeting approach requires that every number in the budget be justified from "the ground up." Which of the following formulas is used to calculate the amount of factory overhead applied to a job under normal costing? OOOOO POHR times the actual amount of allocation base used by the job actual MOH minus applied MOH budgeted MOH divided by the budgeted total allocation base quantity of material used by the job times the price paid per unit of material direct labor hours used for the job times the direct labor wage rate Which of the following metrics indicates how much gross profit a merchandiser earns for each dollar of cost of goods sold recognized? Gross profit percentage Markup percentage Sales revenue percentage Cost of goods sold percentage Operating income percentage