If a Company's Pricing Objective Is to Meet the Competition

question 87

Multiple Choice

If a company's pricing objective is to meet the competition or to maintain existing prices,it is using _____ pricing.

• A) head-on
• B) target return on investment
• C) status quo
• D) market share
• E) demand-oriented

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Definitions:

Predetermined Overhead Rate

A rate used to allocate manufacturing overhead costs to products based on a set formula, before the actual costs are known.

Manufacturing Overhead

All indirect costs associated with the production process, including utilities, maintenance, and factory management salaries, which cannot be directly traced to individual products.

Job Costing

An accounting method used to track costs and revenues by job or project, typically applied in industries that produce unique products or offer services tailored to specific customer requirements.

Factory Overhead Rate

is a calculation used to allocate the indirect costs of manufacturing to individual units produced, typically based on direct labor hours or machine hours.