True OR False

1- Variable selling and administrative costs are excluded from the cost base used to set a selling price under the absorption approach to cost-plus pricing described in the text. ( )

2- Under the absorption approach to cost-plus pricing described in the text, all fixed costs are included in the cost base in setting a selling price ( )

3- If the formula for the markup percentage on absorption cost is used for setting prices, then the company's desired return on investment (ROI) will be attained regardless of how many units are actually sold. ( )

4- In the absorption approach to cost-plus pricing, the anticipated markup in dollars is equal to the anticipated profit. ( )

5- Generally speaking, managers should set higher prices when demand is elastic and lower prices when demand is inelastic. ( )

6- All other things equal including costs, if customers are more sensitive to price for one product than another, then to maximize profit the first product should have a higher price. ( )

7- In value-based pricing, the value of what differentiates a product from the best available alternative is known as the differentiation value. ( )

8- A products economic value to the customer is the variable cost of the product plus the value of what differentiates the product from that alternative. ( )

9- In target costing, the cost of a product is the starting point and the selling price follows from the cost. ( )

10- Target costing is primarily used with well-established products. ( )