Many Consumers Are Willing to Pay $100 for a Perfume

question 83

Multiple Choice

Many consumers are willing to pay $100 for a perfume that contains $10 worth of scent because the perfume is from a well-known brand. What kind of a pricing is the company depending on?

• A) going-rate pricing
• B) image pricing
• C) market-skimming pricing
• D) target pricing
• E) markup pricing

---

Definitions:

Direct Materials

Raw materials directly used in the manufacturing of a product that can be directly traced to that product.

Variable Overhead

Variable overhead refers to the indirect costs of production that fluctuate with the level of output, such as utilities and materials.

Variable Costing

An accounting method that only includes variable production costs in product costs, excluding fixed costs.

Direct Materials

Raw materials that can be directly linked to the production of specific goods or services.