One Reason Why So Many Prices End in the Number

question 72

Multiple Choice

One reason why so many prices end in the number 9 is that they:

• A) increase the credibility of manufacturers.
• B) are easy to understand for consumers.
• C) enhance consumer perception of product quality.
• D) are perceived by consumers to be cheaper.
• E) are fixed by market demand as default.

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Definitions:

Conversion Costs

The combination of direct labor and manufacturing overhead costs incurred to convert raw materials into finished goods.

Equivalent Units

A concept in cost accounting used to allocate costs to partially completed goods, measuring them in terms of the amount of completed goods they represent.

Direct Materials

Raw materials that are directly traceable to the manufacturing of a product and are allocable to that product.

Job Order Manufacturing

A production system in which products are manufactured individually or in batches based on specific customer orders.