Question 1

Creative Quilts Studio sells hundreds of colors and types of fabric and thread.To price its inventory,the owners add 50 percent to the cost of each bolt of fabric and every spool of thread.What is this pricing approach called?

Accepted Answer

A)  target return-on-sales pricing
B)  flexible pricing
C)  cost-plus pricing
D)  standard markup pricing
E)  customary pricingF) A) and E)
G) B) and E) D

Question 2

The two general methods for quoting prices related to transportation costs are FOB origin pricing and __________.

Accepted Answer

A)  uniform delivered pricing
B)  mode of transportation pricing
C)  regional pricing
D)  flexible pricing
E)  FOB destination pricingF) A) and C)
G) C) and E)

Question 3

A manufacturer does marketing research and estimates that consumers will accept a manufacturer's suggested retail price of $50 for a jacket.The manufacturer expects to offer trade discount terms of 40/10/5 to retailers,wholesalers,and agents in its marketing channel.What price will the manufacturer receive for the jacket?

Accepted Answer

A)  $47.50
B)  $45.00
C)  $30.00
D)  $27.50
E)  $25.65F) A) and B)
G) D) and E)

Question 4

Figure 14-1 above represents the six steps in setting price.Which letter represents the step where a firm would establish a fixed price or a dynamic pricing policy?

Accepted Answer

A)  "A"
B)  "F"
C)  "C"
D)  "E"
E)  "D"F) All of the above
G) C) and E)

Question 5

Cost-plus pricing refers to

Accepted Answer

A)  summing the total unit cost of providing a product or service and adding a specific amount to the cost to arrive at the price.
B)  setting the price of a line of products at a number of different price points.
C)  adding a fixed percentage to the cost of all items in a specific product class.
D)  setting prices to achieve a profit that is a specified percentage of the sales volume.
E)  increasing the price slightly to protect against undue profit losses from unforeseen environmental forces.F) A) and E)
G) B) and E)

Question 6

Which of the following pricing techniques results in the manufacturers deliberately adjusting the composition and features of a product to achieve the desired price for consumers?

Accepted Answer

A)  cost-plus percentage-of-cost pricing
B)  standard markup pricing
C)  cost-plus fixed-fee pricing
D)  experience curve pricing
E)  target pricingF) None of the above
G) B) and C) E

Question 7

Which of the following type of business is most likely to use cost-plus percentage-of-cost pricing?

Accepted Answer

A)  real estate agency
B)  insurance company
C)  power company
D)  space shuttle contractor
E)  architectF) A) and B)
G) C) and D)

Question 8

Reductions from list or quoted prices to buyers for performing some activity are referred to as

Accepted Answer

A)  allowances.
B)  subsidies.
C)  remittances.
D)  noncumulative deductions.
E)  list price deductions.F) A) and B)
G) C) and D)

Question 9

The UMD14: Price Premium Marketing Dashboard above shows the dollar and unit market shares for selected energy drinks.What is the price premium for Red Bull in 2010?

Accepted Answer

A)  -12.5%
B)  -7.5%
C)  -5.3%
D)  0%
E)  15.2%F) A) and C)
G) A) and B)

Question 10

The Brazilian government wants to build a global positioning satellite (GPS) system.The satellite manufacturer will receive a mutually agreed upon profit over and above all costs associated with the project.The pricing approach the satellite manufacturer uses is called

Accepted Answer

A)  standard markup pricing.
B)  experience curve pricing.
C)  cost-plus percentage-of-cost pricing.
D)  cost-plus fixed-fee pricing.
E)  bundle pricing.F) A) and B)
G) B) and E)

Question 11

Suppose a firm selects its plant in St.Louis as the location from where it will ship its products to all of the identified cities shown in Geographical Pricing Map C above.The MSRP of the product is $100 but the firm adds a freight surcharge to cover transportation/freight.This surcharge will vary according to the distance between the origin of the shipment-in this case St.Louis-and the destination or customer's location.In this pricing method,what is St.Louis called?

Accepted Answer

A)  basing-point
B)  FOB origin point
C)  multiple-zone location
D)  FOB freight location
E)  FOB destination pointF) A) and B)
G) A) and C)

Question 12

A custom kitchen cabinet storeowner wishes to use a target return-on-sales pricing approach to establish a price for a typical section of cabinets.Assume that variable costs total $200 per unit,fixed cost is $44,000,and the storeowner desires a target profit of 20 percent return on sales at an annual volume of 400 cabinets.What price should be charged for a typical cabinet section?

Accepted Answer

A)  $263.50
B)  $311.00
C)  $387.50
D)  $445.50
E)  $775.00F) B) and C)
G) A) and E)

Question 13

All of the following are competition-oriented approaches to selecting an approximate price level EXCEPT:

Accepted Answer

A)  loss leader pricing.
B)  customary pricing.
C)  above-market pricing.
D)  skimming.
E)  at-market pricing.F) All of the above
G) A) and E)

Question 14

The first Apple iPhone was introduced in 2007 at an initial price of $600.People waited in line overnight so they could be one of the first to own this unique smartphone.Which pricing strategy did Apple use to help recoup its research and development costs for the smartphone?

Accepted Answer

A)  penetration pricing
B)  experience curve pricing
C)  customary pricing
D)  skimming pricing
E)  target pricingF) B) and E)
G) B) and C)

Question 15

After offering a promotional allowance,the price of a product returns to its regular price level.When this happens,the retail store's gross margin on that product __________ on those items that were bought with the allowance but not sold during the price special promotion.

Accepted Answer

A)  decreases substantially
B)  increases substantially
C)  remains the same
D)  fluctuates wildly
E)  vanishesF) B) and D)
G) B) and E)

Question 16

The price the seller quotes that includes all transportation costs is referred to as __________.

Accepted Answer

A)  inclusive transport pricing
B)  geomodal pricing
C)  uniform delivered pricing
D)  FOB origin pricing
E)  FOB destination pricingF) None of the above
G) B) and E)

Question 17

Noncumulative quantity discounts refer to

Accepted Answer

A)  discounts that are based on a series of orders rather than on the size of an individual order.
B)  one-time discounts per customer or household.
C)  one-time discounts that must be used within a certain time frame or they will become null and void.
D)  discounts used to place new products on supermarket shelves.
E)  discounts that are based on the size of an individual purchase order rather than a series of orders.F) None of the above
G) A) and B)

Question 18

A dynamic pricing policy refers to

Accepted Answer

A)  setting the price of a line of products at a number of different specific pricing points.
B)  setting the prices for all items in a product line to cover the total cost and produce a profit for the complete line,not necessarily for each item.
C)  deliberately selling a product below its customary price,not to increase sales,but to attract customers' attention in hopes that they will buy other products as well.
D)  setting different prices for products and services in real time in response to supply and demand conditions.
E)  Adding a fixed percentage to the cost of all items in a specific product class.F) A) and B)
G) A) and C)

Question 19

Define the four kinds of uniform delivered pricing methods and give an example of the use of each.

Accepted Answer

The four kinds of delivered pricing meth...

Question 20

Figure 14-7 above shows the three major types of special adjustments to list or quoted price."A" represents

Accepted Answer

A)  demand-oriented price adjustments.
B)  allowances.
C)  geographical adjustments.
D)  discounts.
E)  customary pricing adjustments.F) A) and B)
G) None of the above D

Exam 14: Arriving at the Final Price

Creative Quilts Studio sells hundreds of colors and types of fabric and thread.To price its inventory,the owners add 50 percent to the cost of each bolt of fabric and every spool of thread.What is this pricing approach called?

Correct Answer
verified
D

The two general methods for quoting prices related to transportation costs are FOB origin pricing and __________.

Correct Answer
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Correct Answer
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Figure 14-1 above represents the six steps in setting price.Which letter represents the step where a firm would establish a fixed price or a dynamic pricing policy?

Correct Answer
verified

Cost-plus pricing refers to

Correct Answer
verified

Which of the following pricing techniques results in the manufacturers deliberately adjusting the composition and features of a product to achieve the desired price for consumers?

Correct Answer
verified
E

Which of the following type of business is most likely to use cost-plus percentage-of-cost pricing?

Correct Answer
verified

Reductions from list or quoted prices to buyers for performing some activity are referred to as

Correct Answer
verified

The UMD14: Price Premium Marketing Dashboard above shows the dollar and unit market shares for selected energy drinks.What is the price premium for Red Bull in 2010?

Correct Answer
verified

The Brazilian government wants to build a global positioning satellite (GPS) system.The satellite manufacturer will receive a mutually agreed upon profit over and above all costs associated with the project.The pricing approach the satellite manufacturer uses is called

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

All of the following are competition-oriented approaches to selecting an approximate price level EXCEPT:

Correct Answer
verified

The first Apple iPhone was introduced in 2007 at an initial price of $600.People waited in line overnight so they could be one of the first to own this unique smartphone.Which pricing strategy did Apple use to help recoup its research and development costs for the smartphone?

Correct Answer
verified

After offering a promotional allowance,the price of a product returns to its regular price level.When this happens,the retail store's gross margin on that product __________ on those items that were bought with the allowance but not sold during the price special promotion.

Correct Answer
verified

The price the seller quotes that includes all transportation costs is referred to as __________.

Correct Answer
verified

Noncumulative quantity discounts refer to

Correct Answer
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A dynamic pricing policy refers to

Correct Answer
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Define the four kinds of uniform delivered pricing methods and give an example of the use of each.

Correct Answer
verified
The four kinds of delivered pricing meth...
View Answer

Figure 14-7 above shows the three major types of special adjustments to list or quoted price."A" represents

Correct Answer
verified
D

Exam 14: Arriving at the Final Price

Creative Quilts Studio sells hundreds of colors and types of fabric and thread.To price its inventory,the owners add 50 percent to the cost of each bolt of fabric and every spool of thread.What is this pricing approach called?

Correct AnswerverifiedD

The two general methods for quoting prices related to transportation costs are FOB origin pricing and __________.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Figure 14-1 above represents the six steps in setting price.Which letter represents the step where a firm would establish a fixed price or a dynamic pricing policy?

Correct AnswerverifiedShow Answer

Cost-plus pricing refers to

Correct AnswerverifiedShow Answer

Which of the following pricing techniques results in the manufacturers deliberately adjusting the composition and features of a product to achieve the desired price for consumers?

Correct AnswerverifiedE

Which of the following type of business is most likely to use cost-plus percentage-of-cost pricing?

Correct AnswerverifiedShow Answer

Reductions from list or quoted prices to buyers for performing some activity are referred to as

Correct AnswerverifiedShow Answer

The UMD14: Price Premium Marketing Dashboard above shows the dollar and unit market shares for selected energy drinks.What is the price premium for Red Bull in 2010?

Correct AnswerverifiedShow Answer

The Brazilian government wants to build a global positioning satellite (GPS) system.The satellite manufacturer will receive a mutually agreed upon profit over and above all costs associated with the project.The pricing approach the satellite manufacturer uses is called

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

All of the following are competition-oriented approaches to selecting an approximate price level EXCEPT:

Correct AnswerverifiedShow Answer

The first Apple iPhone was introduced in 2007 at an initial price of $600.People waited in line overnight so they could be one of the first to own this unique smartphone.Which pricing strategy did Apple use to help recoup its research and development costs for the smartphone?

Correct AnswerverifiedShow Answer

After offering a promotional allowance,the price of a product returns to its regular price level.When this happens,the retail store's gross margin on that product __________ on those items that were bought with the allowance but not sold during the price special promotion.

Correct AnswerverifiedShow Answer

The price the seller quotes that includes all transportation costs is referred to as __________.

Correct AnswerverifiedShow Answer

Noncumulative quantity discounts refer to

Correct AnswerverifiedShow Answer

A dynamic pricing policy refers to

Correct AnswerverifiedShow Answer

Define the four kinds of uniform delivered pricing methods and give an example of the use of each.

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Figure 14-7 above shows the three major types of special adjustments to list or quoted price."A" represents

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