Developing pricing strategies and programs - MCQs with answers - Part 4

Developing pricing strategies and programs - MCQs with answers - Part 4

Estimating Costs, Analyzing Competitors Costs, Prices and Offers

1. Each month bills for rent, heat, salaries irrespective of the output is

a) Variable costs
b) Fixed costs
c) Average costs
d) Total costs

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2. There are costs that tend to be constant per unit produced but vary with the level of production. Such costs are called as

a) Variable costs
b) Fixed costs
c) Average costs
d) Total costs

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3. The sum of the variable costs and fixed costs for any given level of production is called as

a) Variable costs
b) Fixed costs
c) Average costs
d) Total costs

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4. The cost per unit at a given level of production is

a) Variable costs
b) Fixed costs
c) Average costs
d) Total costs

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5. Manufacturers should use __________ to know the real profitability of selling to different types of customers or retailers

a) ABC Accounting
b) XYZ Accounting
c) Standard cost accounting
d) None of the above

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6. ABC Accounting tries to

a) Figure out the real costs linked with serving each customer
b) Identifies the fixed costs linked with serving each customer
c) Identifies the variable costs linked with serving each customer
d) None of the above

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7. The drop in the average cost with accumulated production experience is stated as

a) Experience curve
b) Learning curve
c) Both a and b
d) None of the above

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8. When a competitor has a _________it probably will match price differences or changes.

a) Profit maximization objective
b) No specific objective
c) Market-share objective
d) None of the above

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9. When a competitor has a _____________, it will improve the product quality or increase advertising budget.

a) Profit maximization objective
b) No specific objective
c) Market-share objective
d) None of the above

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10. What is the major consideration in price setting?

a) Costs form a base to the price.
b) Price of substitutes and competitors prices are orienting point
c) Customers evaluation of the unique features
d) All of the above

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11. In mark up pricing, unit price is calculated by

a) Variable costs+ (Fixed cost/Unit sales)
b) Variables costs + Fixed cost
c) (Variables costs/Unit sales) + Fixed cost
d) Supply Chain dimension

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12. In mark up pricing sellers can evaluate costs much easier than they can measure demand.

a) True
b) False
c) Can't say
d) None of the above

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13. Mark up pricing is

a) Fairer to both buyers and sellers
b) Fairer to buyers
c) Fairer to sellers
d) None of the above

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14. In________ an organization decides the price that would yield its target rate of ROI.

a) Mark up pricing
b) Target return pricing
c) Perceived value pricing
d) Value pricing

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