Acc 560 Wk 6 Quiz 8 - All Possible Questions

ACC 560 WK 6 Quiz 8 - All Possible Questions

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ACC 560 WK 6 Quiz 8 - All Possible Questions

TRUE-FALSE STATEMENTS

    1.     In most cases, a company sets the price instead of it being set by the competitive market.

    2.     In a competitive market, a company is forced to act as a price taker and must emphasize minimizing and controlling costs.

    3.     The difference between the target price and the desired profit is the target cost of the product.

    4.     In a competitive environment, the company must set a target cost and a target selling price.

    5.     The cost-plus pricing approach establishes a cost base and adds a markup to this base to determine a target selling price.

    6.     The cost-plus pricing model gives consideration to the demand side—whether customers will pay the target selling price.

    7.     Sales volume plays a large role in determining per unit costs in the cost-plus pricing approach.

    8.     In time-and-material pricing, the material charge is based on the cost of direct materials used and a material loading charge for related overhead costs.

    9.     The first step for time-and-material pricing is to calculate the material loading charge.

  10.     The material loading charge is expressed as a percentage of the total estimated cost of materials for the year.

  11.     Divisions within vertically integrated companies normally sell goods only to other divisions within the same company.

  12.     Using the negotiated transfer pricing approach, a minimum transfer price is established by the selling division.

  13.     There are two approaches for determining a transfer price: cost-based and market-based.

  14.     If a cost-based transfer price is used, the transfer price must be based on variable cost.

  15.     A problem with a cost-based transfer...