A Business Model Is the Mechanism Whereby, Through Effective Pricing

question 4

Multiple Choice

A business model is the mechanism whereby, through effective pricing, sales are transformed into revenues, costs are covered and __________ for the business owners.

• A)value is created
• B)costs are marginal
• C)marketing is created
• D)pricing is scheduled
• E)a value proposition is developed

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Definitions:

Weighted-Average Method

A costing method that assigns inventory and cost of goods sold values based on an average of the costs of all goods available for sale during the period, weighted by quantity.

Conversion Costs

refers to the combined costs of direct labor and manufacturing overhead expenses in the production process, essential for transforming materials into finished goods.

Materials

The physical components or supplies used in the production of goods and services.

Conversion Costs

The costs associated with converting raw materials into finished goods, including labor and overhead but excluding the cost of the raw materials themselves.