1. Setting the sales price is one of the most important decisions any manager can make. Why is this statement true?

1. Since stock price is the most important part of business, getting the most profit can only be achieved with a high price on your products.
2. Price is important but if marketing has done their job, your products will fly off the shelf no matter what price you set.
3. The price a company sets should cover all costs to make the product and return the best profit for the resources used.
4. The price must not be too low or too high, return an appropriate profit, reflect the quality of the item, and the customer must be satisfied with the product.

2. When setting a sales price, which concept is not a feasible way to set the price?

1. Set the price close to your competitor of the same quality as your product.
2. Complete a customer survey to find the target price.
3. Set the price high so that you make as much profit as you can, even though your quality is not as high as other products in that price category.
4. Complete the calculations to earn a certain percentage of profit that is customary for the product.

3. A good cost driver will accurately:

1. Track costs for all departments but each department will have to estimate their own cost drivers.
2. Track costs from prior periods.
3. Track the changes in costs during the year and predict total overhead for the same period.
4. Allow managers to add hours to help their employees.