When a Company Exports a Product from the United States

question 36

Multiple Choice

When a company exports a product from the United States to another country, the company is most likely to be unable to determine the ultimate price of a product if

• A) the channels of distribution are short.
• B) the number of middlemen in its distribution channels is low.
• C) large orders are placed by retailers.
• D) marketing and distribution channel infrastructures are well developed.
• E) the middleman markups are not standardized.

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Definitions:

High-Low Method

A technique used in cost accounting to estimate variable and fixed costs by analyzing the highest and lowest levels of activity and their associated costs.

Variable Cost

Variable costs are expenses that vary directly with the level of production or sales volume, such as raw materials and packaging.

Fixed Cost

Expenses that do not change in proportion to the level of goods or services produced by a business.

Contribution Format

An income statement format that separates fixed and variable costs and expenses, used to determine contribution margin.