164.The Coca-Cola Company is the _ of that firm.
B. brand name
C. trade name
D. brand identity
165.A trademark refers to
A. any word, device (design, sound, shape or color), or combination of these used to distinguish a seller's
244.Any container in which a product is offered for sale and on which information is communicated is
referred to as _.
A. point of purchase display
D. a storage unit
E. gift wrap
245.The three main benefits that packaging pro
120.Managers often use two special indexes to help identify strong and weak market segments in order to
provide direction for marketing efforts. The two indexes are
A. marketing efficiency and production efficiency.
B. dollar market share and unit market
100.As product adopters, laggards
A. have a fear debt and use neighbors and friends as information sources.
B. are skeptical and have below average social status.
C. are deliberate and use many informal social contacts.
D. are leaders in social settings a
106.There are several reasons why a consumer would be reluctant to purchase a new product. One example
would be a risk barrier, which occurs when
A. there is no incentive to change.
B. there are physical, economic, or social risks.
C. there are cultural r
12. Gillette spent $200 million in advertising to introduce the Fusion razor to male shavers. Such
expenditures are often made to stimulate primary demand, or desire for _, rather than for a
specific brand, when there are few competitors with the same pro
279.What are the five product life cycle types described in the text? For each type, describe (and as an option,
draw) its characteristics.
280.Describe the concept diffusion of innovation. Identify and describe the profile and percentage (incidence
284.There are several visible differences between the two packages in Figure 11-8 above. Discuss which
aspect(s) might be considered legal but unethical, and why.
285.What is the difference between a brand name and a trade name? Give an exampl
d. Focuses attention on the real nature of cost behavior. Helps in identifying non-value adding activities
hence reducing costs. e. ABC recognizes the complexity and diversity of modern production before the
use of multiple cost drivers, many of which are
Interpretation: Every time cumulative output doubles, average cost declines to 80 percent of the
previous amount. Since the average cost of the first 1000 units was sh.10, the average cost of the first
2000 units will be expected to be 20% or sh.8 per uni
1. Define the following: a) Cost unit b) Direct cost c) Indirect cost d) Prime costs e) Overheads f) Cost
centre g) Cost allocation h) Cost apportionment
2. Distinguish between marginal costing and absorption costing. 3. What is activity base
2.3 ABSORPTION COSTING
Its objective is to include the total cost of a product and the appropriate share of the organizations total
overheads. Appropriate share means an amount which reflects the amount of time and effort that has
gone into producing a un
Average cost of the first 800 units = 0.9 x 0.9 x 0.9 x sh.100 = sh72.90 Total cost = sh (72.90 x 800) = sh.
Average cost of the first 1600 units = 0.9 x 72.90 = sh.65.61 Total cost of 1600 units = 1600 x sh65.61 =
sh.104,976 Additional cost of sec
2.9 COSTS FORECASTING
i. Engineering method
This method is used when no previous records of costs exist. It is a very detailed method that goes into
the nitty-gritty of what constitutes a product in terms of how much material or how much labor. From
Less Admin & Selling (25000) Less Fixed cost:
Admin 25000 (45000)
a) Closing stock valuation Absorption: $50000 = $2.5
20000 Marginal: $35000 = $1.75
With fixed costs, absorption costing transfers some of this years f
2.10.3 EVALUATION OF THE REGRESSION MODEL
The regression equation calculated above was based on the assumption that cost varied with the units
produced. However, a number of different activity measures exist such as direct labour hours, direct
2.6.1 ACTIVITY BASED COSTING
FAST FORWARD: ABC is more realistic in attributing overheads at the same time it shows the relationship
between overhead costs and activities that cause them.
It can be thought of as a method of charging overheads to cost unit
Decision: Set the price at sh4.00 since it minimizes the CV (coefficient of variation)
1.7 MULTISTAGE DECISION MAKING UNDER RISK
Sequencing is concerned with the selection of an appropriate sequence or order of performing a series
of jobs to be done on a
Accounting is the process of identifying measuring and communicating economic information to permit
informed judgments and decisions by users of information. Management Accounting is the process of
identification, measurement accumulation,
The amount of detail should be that which is sufficient for the intended purpose. The amount of detail
will depend on the recipients level in the organization as explained earlier.
Note: Controlling accuracy - Source reliability
Data may be col
QUESTION ONE The Oil Kenya Company currently sells three grades of petrol; regular, premium and
regular extra which is a mixture of regular and premium. Regular extra is advertised as being at least
50% premium. Although any mixture contain
Usually the top management will be involved in the use of this information. Information will in most
cases have a future orientation. This level has an ad hoc control system and reports will be imprecise and
speculative. The outcomes of this information p
CHAPTER TWO COST ESTIMATION AND FORECASTING
After this topic, the student will be able to: know and explain the structure of costs determine cost of
a product using various methods know how costs behave in relation mostly to the level o
From the users point of view accounting can be divided into two:
What is Management Accounting? It is the process of identification, measurement, accumulation,
analysis, preparation, interpretation and communication of financial info
its environmentthat is, the products it makes, the markets it operates in and its ability to meet future
changes. Such decisions dictate the firms long-run possibilities and hence the type of decisions it can
make in the future. These decisions are normal
or she (or the spouse or dependents) owns stocks in that company and/or has certain other financial or
employment relationships with the client.
Ethics Enforcement To a large extent, the accounting profession is self-regulated through various
273.BMW used to produce the 1, 3, 5, 6, and 7 series of automobiles. This represented what type of branding
A. brand licensing
C. family branding
D. trademark naming
E. multiproduct branding
274.When BMW placed their cars in fou
You can use the following items during all exams:
A calculator that cannot send or receive any
data, email, graph and etc. Organizers, PDAs or
laptops are not permitted. Backup batterie
Cost of Capital
Readings: Chap 12 ( 12.1-12.5)
NPV = CF0 +
(1+ r )t
(1+ r )1 (1+ r )2
do we figure out discount rate (cost of capital)?
Back to the portfolio theory
Liabilities & Equity