If a Firm Offers Quantity Discounts or Special Promotional Allowances

question 114

Multiple Choice

If a firm offers quantity discounts or special promotional allowances only to favored distributors and the effect is to substantially lessen competition, then it is in violation of the:

• A) Clayton Act.
• B) Robinson-Patman Act.
• C) Sherman Antitrust Act.
• D) Federal Trade Commission Act.
• E) Celler-Kefauver Act.

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Definitions:

Overhead Cost

Indirect expenses related to the general operation of a business, such as rent, utilities, and administrative salaries, not directly tied to any specific product or service.

Direct Labor-Hours

The total hours worked by employees who are directly involved in the production process, often used to allocate manufacturing overhead.

Activity-Based Costing

A costing method that allocates overhead costs to products based on the activities required to produce them.

Manufacturing Overhead

includes all the indirect costs associated with the production process, such as utilities, maintenance, and factory equipment depreciation, which are not directly traceable to a specific product.