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Self-Study Quiz: Multiple Choice

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This activity contains 10 questions.

Question 1.
A short run pricing decision typically has a time horizon of less than

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Question 2.
Which one of the following activities would most likely be considered a long run pricing decision?

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Question 3.
The costs that should be considered relevant in a company's target-cost calculation are

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Question 4.
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

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Question 5.

Action Toys has a new video game cassette for the upcoming holiday season. It is trying to determine the target cost for the game if the selling price per unit will be set at $55, the going price for video games, and the firm wants to earn a target operating income of 12% of sales. What will the target cost per unit for the new game be?

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Question 6.
Which of the following is NOT one of the steps in implementing target costing and target pricing?

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Question 7.
When the firm is using the target-costing approach, and has implemented value engineering and continuous improvement techniques, the focus should be on all of the following EXCEPT for

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Question 8.
Under the cost-plus approach to pricing products, all of the following are prospective cost bases except for

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Question 9.

ACB Inc. produces a product called Zite. The following cost information is available with respect to Zite on a per unit basis: direct materials, $5; direct labor, $4; variable manufacturing overhead, $2; variable marketing, $2; fixed manufacturing, $4; fixed marketing $2. If ACB wants to earn a 55% markup on the total variable product cost, what is the amount of the markup?

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Question 10.
The tracking of business function costs of the value chain from research and development to final customer support and service costs is known as

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