Diego's Company Was Bidding on the Construction of a New

question 48

Multiple Choice

Diego's company was bidding on the construction of a new penguin display at a zoo. When putting together his bid, Diego began by determining what the zoo would be willing to pay for the structure, and then subtracting a reasonable profit for the company. The result would be the cost of production. For example: If price to zoo = $8 million, and company profit margin = $3 million, the cost to produce cannot exceed $5 million. [$8 million - $3 million = $5 million.] The demand-based pricing strategy in this example is called

• A) target costing.
• B) penetration pricing.
• C) cost-based pricing.
• D) volume pricing.

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Definitions:

Royal Portal

The ornate main entrance to the Cathedral of Chartres, France, featuring statues and carvings of biblical figures, characteristic of Gothic architecture.

Chartres

A city in France renowned for its Gothic Cathedral of Chartres, a masterpiece of French Gothic architecture.

Late Romanesque

A style in architecture and art of the 11th and 12th centuries in Europe, characterized by semicircular arches, robust structures, and decorative arcading.

High Gothic

A phase of Gothic architecture between the 13th and 14th centuries, characterized by taller structures, pointed arches, and light-filled interiors, exemplified by cathedrals like Chartres and Reims.