Scenario 12

question 119

Multiple Choice

Scenario 12.2 Use the following to answer the questions.
The BASF Chemical Company in Germany has developed a new rubberized coating. The product has an application for cell phones and other hand-held electronic devices that gives them protection from falls and scratches. BASF plans to market the product directly to businesses that manufacture the casings for these types of products. BASF currently uses a system of salespeople headquartered in Germany, while its primary business customers are in China.
Refer to Scenario 12.2. If BASF were to price its product in barrels from the factory, before it is loaded on the carrier, this would be an example of ____ pricing.

• A) buy-back allowance
• B) geographic
• C) F.O.B destination
• D) F.O.B. factory
• E) base-point

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Definitions:

Underapplied Overhead

A situation where the allocated overhead costs are less than the actual overhead costs incurred.

Cost of Goods Sold

The total cost directly associated with producing the goods that have been sold during a specific period.

Period End

The conclusion of an accounting period, at which time financial statements are prepared and financial activities are summarized.

Transfer

The movement of resources, products, or services from one part of an organization to another.