Which Is Correct Regarding Value-Of-Service Pricing

question 20

Multiple Choice

Which is correct regarding value-of-service pricing?

• A) the model is used to determine the lower limit of freight rates
• B) the model considers the supply side of the transportation pricing function
• C) the value of the product is considered to be irrelevant in the determination of the freight rate
• D) the model considers the ability of the commodity to bear a charge

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Definitions:

Supplies Expense

Supplies expense refers to the cost associated with items consumed or used up in the operation of a business, which are not directly part of the manufactured product.

Income Statement

A financial document that summarizes a company's revenues, expenses, and profits or losses over a specific period.

Prepaid Expense

Expenses paid in advance for goods or services to be received in the future, recorded as an asset on the balance sheet until they are incurred.

Prepaid Insurance

The portion of insurance premiums that have been paid in advance and is recorded as an asset until utilized.