The Marginal Cost Method of Pricing Considers the Direct Costs

question 4

Multiple Choice

The marginal cost method of pricing considers the direct costs of producing and selling products for export. What costs need to be excluded in these direct costs?

• A) currency fluctuations
• B) potential government regulations in future legislative sessions
• C) fixed costs, R&D and domestic overhead
• D) weather forecasts, especially in regards to El Nino

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Definitions:

Lower Control Limit

The lowest boundary of acceptable performance in a statistical quality control chart, below which a process is considered out of control.

Assignable Causes

Specific, identifiable factors leading to variations in a process or system, as opposed to random variations.

Variation

The degree to which data points in a statistical distribution or dataset differ from each other and from the mean of the set.

Specification Limits

Pre-determined upper and lower bounds within which a product or process's performance is considered acceptable.