Those costs that vary with a seasonal demand b

This preview shows 100 out of 104 pages.

those costs that vary with: A. seasonal demand. B. quality of the product.
Image of page 100

Subscribe to view the full document.

C. automation. D. production volume. E. All of these. Variable costs are costs that change as the production quantity changes. AACSB: Analytic Blooms: Remember Difficulty: 1 Easy Learning Objective: 13-01 List the four pricing orientations. Topic: 5 Cs of Pricing 97. (p. 277) David manages a Shoney's restaurant. He is considering staying open later in the evening. For David, the variable costs associated with staying open longer hours will include all of the following EXCEPT: Rent is unlikely to be based on hours opened, so this will be a fixed cost. All the other costs could rise when the hours are extended. AACSB: Analytic Blooms: Apply Difficulty: 2 Medium Learning Objective: 13-01 List the four pricing orientations. Topic: 5 Cs of Pricing 98. (p. 277) Variable costs change with: Variable costs are costs that change as the production quantity changes. AACSB: Analytic Blooms: Remember
Image of page 101
Difficulty: 1 Easy Learning Objective: 13-01 List the four pricing orientations. Topic: 5 Cs of Pricing 99. (p. 277) Often, at the beginning of a semester, professors are encouraged or directed to allow students to be added to a class after the course has started. For the university, the variable cost of adding another student to a class: Variable costs are costs that change as the production quantity changes. In this case, the "production quantity" is the class size. It costs almost nothing to have an extra student in a class, as long as space is available in the classroom, since professors are not paid on a per-student basis. AACSB: Analytic Blooms: Apply Difficulty: 3 Hard Learning Objective: 13-01 List the four pricing orientations. Topic: 5 Cs of Pricing 100. (p. 277) __________ are costs that remain constant as the volume of production increases or decreases. A. Fixed costs B. Variable costs C. Beneficial costs D. Contribution per unit costs E. Break-even point costs Fixed costs remain constant as the production volume changes. AACSB: Analytic Blooms: Remember Difficulty: 1 Easy Learning Objective: 13-01 List the four pricing orientations. Topic: 5 Cs of Pricing 101. (p. 277) Raymond estimates that the fixed costs associated with opening a new bank branch are
Image of page 102

Subscribe to view the full document.

$500,000. He expects the branch to attract 1,000 new customer accounts in the first year, each of which will cost $50 per year to service. He also expects to generate $100,000 per year in revenue.
Image of page 103
Image of page 104
You've reached the end of this preview.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern