​Half of All Your Potential Customers Would Pay $16 for Your

question 44

Multiple Choice

​Half of all your potential customers would pay $16 for your product but the other half would only pay $10.You cannot tell them apart.Your marginal costs are $4.If you set the price at $16,the expected profit is:

• A)​$3
• B)$4
• C)$5
• D)​$6

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Definitions:

Actual Information

Factual data or evidence that is true and accurate, without alteration or distortion.

Raw Materials Quantity Variance

The difference between the actual quantity of raw materials used in production and the estimated quantity expected to be used, measured in terms of cost.

Direct Materials Purchases Variance

This measures the difference between the actual cost of direct materials purchased and the expected (or standard) cost of those materials.

Actual Results

The real outcomes or data achieved, as opposed to forecasts or projections.