TEK 13 FALL, 2017 ULTIPLE CHOICE- CIRCLE THE LETTER OF THE CORRECT ANSWER 1. Companies must always examine their pricing A. Based on the supply of the product B. Based on the full cost of producing the product and price to make a profit C. Through the eyes of their customers and then manage costs to produce a profit D. Based on the GAAP cost of producing the product and then add a mark-up 2. In a perfectly competitive market, which of the following is a primary factor influencing prici decisions? A. Cost of production B. Availability of raw materials in the market C. Information on competitor's cost structure D. Value customers place on product 3. Three major influences on pricing decisions are A. Competition costs, and customers B. Competition, demand, and production efficiency C. Continuous improvement, customer satisfaction, and supply D. Variable costs, fixed costs, and mixed costs 4. Which of the following is regarded as a purpose of cost allocation? A. It helps in identifying the potential customers for a product B. It provides the profit margin earned C. It helps in maintaining decorum among managers D. It provides information for economic decisions 5. Relevant costs for target pricing are A. Variable manufacturing costs B. Variable manufacturing and variable nonmanufacturing costs C. All fixed costs D. All future costs, both variable and fixed 6. When the firm uses the target-costing approach to pricing, the target cost per unit is the difference between the per unit target price and the per unit target A. Contribution margin B. Operating income C. Cost of goods sold D. Gross margin