Texas Instruments Builds a Large Plant to Produce a Great

question 89

Multiple Choice

Texas Instruments builds a large plant to produce a great quantity of products,hoping that as prices decline,sales volume increases and thus costs decline.This market-penetration pricing is dependent upon three conditions existing in the marketplace.Which one of the following is NOT one of these conditions

• A) Low price discourages competition from entering the market.
• B) Production and distribution costs actually fall with increases in production.
• C) Low prices does not increase consumer demand but increases retailer competition.
• D) The market is stimulated by lower prices.
• E) The market is highly price sensitive.

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Definitions:

Cost System

A method employed by a business to track, record, and analyze costs, aiding in financial planning and cost control.

Total Cost Transferred

The aggregate cost of goods or services that is moved from one process or department to another within a company.

Processing Department

A segment of a manufacturing facility where goods undergo part of the production process.

Weighted-Average Method

An inventory costing method that assigns an average cost to each unit of inventory, blending old and new stock costs.