Suppose That the Watchband Department of Timex Sells Completed Watchbands

question 6

Multiple Choice

Suppose that the watchband department of Timex sells completed watchbands to the finished watch department. The finished watch department is charged the price it would have to pay an outside watchband manufacturer less a discount to reflect low sales and transportation costs. This method of pricing is called ____ pricing.

• A) zone
• B) actual full cost
• C) standard full cost
• D) cost plus investment
• E) market-based cost

---

Definitions:

Customers Ledger

A subsidiary ledger containing individual accounts for customers, showing each customer's sales, payments, returns, and the current balance owed.

Creditors Ledger

A ledger that keeps records of the amounts owed by the business to its suppliers or creditors.

Revenue Journal

This is an accounting journal that records all the sales transactions of a company where revenue is recognized, detailing the amount and source of each sale.

Office Supplies

Consumable items and equipment used in offices for daily operations, such as paper, pens, and printers.