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COST ACCOUNTING 13 EDITION HORNGREN (CHAPTER 12 QUIZ AND EXERCISES) CHAPTER 12 PRICING DECISIONS AND COST MANAGEMENT (INSTANT DOWNLOAD)

COST ACCOUNTING 13 EDITION HORNGREN (CHAPTER 12 QUIZ AND EXERCISES) CHAPTER 12 PRICING DECISIONS AND COST MANAGEMENT (INSTANT DOWNLOAD)
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Solution Guide / Answer Key:

Accounting

Cost Accounting 13/e

Horngren, Foster, Datar, Rajan & Ittner

 

CHAPTER 12 QUIZ


1.      Major influences of competitors, costs, and customers on pricing decisions are factors of


a.       supply and demand.

b.      activity-based costing and activity-based management.

c.       key management themes that are important to managers attaining success in their planning and control decisions.

d.      the value-chain concept.


2.      Short-run pricing decisions include


a.       pricing a main product in a major market.

b.      considering all costs in the value-chain of business functions.

c.       adjusting product mix and volume in a competitive market while maintaining a stable price if demand fluctuates from strong to weak.

d.      pricing for a special order with no long-term implications.


3.      [CPA Adapted]  Pritchard Company manufactures a product that has a variable cost of $30 per unit.  Fixed costs total $1,500,000, allocated on the basis of the number of units produced.  Selling price is computed by adding a 20% markup to full cost.  How much should the selling price be per unit for 300,000 units?


a.  $49                   b.  $43.75                                c.  $42                         d.  $35


4.      The first step in implementing target pricing and target costing is


a.       choosing a target price.

b.      determining a target cost.

c.       developing a product that satisfies needs of potential customers.

d.      performing value engineering.


5.      The best opportunity for cost reduction is


a.       during the manufacturing phase of the value chain.

b.      during the product/process design phase of the value chain.

c.       during the marketing phase of the value chain.

d.      during the distribution phase of the value chain.


The following data apply to questions 6 and 7. 

Each month, Haddon Company has $275,000 total manufacturing costs (20% fixed) and $125,000 distribution and marketing costs (36% fixed).  Haddon’s monthly sales are $500,000.


6.      The markup percentage on full cost to arrive at the target (existing) selling price is


a.  25%.                 b.  75%.                       c.  80%.                       d.  20%.


7.      The markup percentage on variable costs to arrive at the existing (target) selling price is


a.  20%.                 b.  40%.                       c.  80%.                       d. 66 %.


8.      The price of movie tickets for opening day and the few days following compared to the price six months later is an example of


a.       price gouging.

b.      peak-load pricing.

c.       dumping.

d.      demand elasticity.


9.      The World Trade Organization (WTO)  is an international institution created with the goal of


a.       levying punitive damages (as much as triple) for proven instances of dumping.

b.      requiring a finding of material injury to an industry before any dumping tariffs can be levied.

c.       putting companies from the more developed countries at a competitive disadvantage to encourage lesser developed nations.

d.      promoting and regulating trade practices among countries by lowering import duties and tariffs.


10.  Which of these do antitrust laws on pricing not cover?


a.       collusive pricing

b.      dumping

c.       peak-load pricing

d.      predatory pricing




WRITING/DISCUSSION EXERCISES


1.       Discuss the three major influences on prices


Using the basic economic concepts of supply and demand, explain why customers, competitors, and costs are considered major influences on pricing decisions

 

2.       Distinguish between short-run and long-run pricing decisions


How does the saying, “A lifetime is but the repetition of one day,” describe the relationship between the short run and the long run?

 

3.       Price products using the target-costing approach


Why is the development “of a product that satisfies needs of potential customers” given as the first step in implementing target pricing and target costing?

 

4.       Apply the concepts of cost incurrence and locked-in costs


How does an understanding of cost incurrence and locked-in costs help a manager prevent “unintended consequences” from occurring in the value chain of business functions?   


5.       Price products using the cost-plus approach


Does a company that uses a market-based approach to pricing need to be more concerned with continuous improvement than a company using a cost-based approach? 

 

6.       Use life-cycle budgeting and costing when making pricing decisions


How does life-cycle product budgeting and costing illustrate the concept of different costs for different purposes?  


7.       Describe two pricing practices in which noncost factors are important when setting prices

 

Why study pricing practices in which cost is not a factor in a cost accounting course?

 

8.       Explain the effects of antitrust laws on pricing

 

What is one of the best ways to insure that a company complies with the antitrust laws on pricing?  


FILE: MS WORD

 

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