Unformatted text preview: Reflective MSC: BLOOMS Knowledge 66. Monthly output at LeisureTime, Inc. changed from 12 to 13 prefabricated gazebos, and the total
costs changed from $9,000 to $10,500. What is the marginal cost for this company?
a.
$1,500
b.
$2,000 c.
d.
e. $1,200
$10,000
$12,000 ANS: A
Marginal cost is the change in total costs associated with a oneunit change in output.
PTS: 1
REF: 309
KEY: CB&E Model Pricing OBJ: 195
TOP: AACSB Analytic
MSC: BLOOMS Analysis 67. When a seller determines the selling price by adding to cost an amount for profit and expenses
not previously accounted for, the seller is using _____ pricing.
a.
profit maximization
b.
demandoriented
c.
breakeven
d.
target return
e.
markup
ANS: E
Markup pricing does not directly analyze the costs of production; rather, is uses the cost of buying
the product from the producer, plus amounts for profit and for expenses otherwise not accounted
for.
PTS: 1
REF: 310
Thinking
KEY: CB&E Model Pricing OBJ: 195 TOP: AACSB Reflective MSC: BLOOMS Knowledge 68. The most popular method used by wholesalers and retailers in establishing a sales price is _____
pricing.
a.
markup
b.
status quo
c.
formula
d.
marginal revenue
e.
breakeven
ANS: A
Markup pricing does not directly analyze the costs of production; rather, is uses the cost of buying
the product from the producer, plus amounts for profit and for expenses otherwise not accounted
for.
PTS: 1
REF: 310
Thinking
KEY: CB&E Model Pricing OBJ: 195 TOP: AACSB Reflective MSC: BLOOMS Comprehension 69. Cowboy Malone’s Electric City pays a wholesaler $700 for a television and sells it to a customer
for $1,500. The markup on the television is:
a.
$240
b.
$160
c.
$700
d.
$800 e. $1,500 ANS: D
Markup is selling price minus cost: $1,500 – $700 = $800.
PTS: 1
REF: 310
KEY: CB&E Model Pricing OBJ: 195
TOP: AACSB Analytic
MSC: BLOOMS Analysis 70. An educational toy store can buy a world globe for $30. If the store owner sells the globe for $45,
what is the markup based on cost?
a.
15 percent
b.
20 percent
c.
25 percent
d.
33 percent
e.
50 percent
ANS: E
Retail price – Cost = Markup$45 – $30 = $15$15 ÷ $30 = 50% markup
PTS: 1
REF: 310
KEY: CB&E Model Pricing OBJ: 195
TOP: AACSB Analytic
MSC: BLOOMS Analysis 71. An educational toy store can buy a world globe for $30. If the store owner sells the globe for $45,
what is the markup based on the selling price?
a.
15 percent
b.
20 percent
c.
25 percent
d.
33 percent
e.
50 percent
ANS: D
Price – Cost = Markup$45 – $30 = $15$15 ÷ $45 = 33% markup
PTS: 1
REF: 310
KEY: CB&E Model Pricing OBJ: 195
TOP: AACSB Analytic
MSC: BLOOMS Analysis 72. The difference between the retailer’s cost and the selling price is the:
a.
gross margin
b.
markup percentage
c.
profit
d.
keystone
e.
breakeven profit
ANS: A
Gross margin is the amount added to cost to determine price.
PTS: 1
REF: 311
Thinking
KEY: CB&E Model Pricing OBJ: 195 TOP: AACSB Reflective MSC: BLOOMS Knowledge 73. The owner of specialty k...
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 Fall '13
 Marketing, AACSB Reflective, CB&E Model Strategy, CB&E Model

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