A Product Is a Price Leader When

question 51

Multiple Choice

A product is a price leader when

• A) it is sold at the highest price.
• B) its price maximizes profits.
• C) an increase or decrease in price leads to increased revenue or lower costs.
• D) it is sold at less than cost in the hope that sales of other products will increase.
• E) its price leads the industry in sales.

---

Definitions:

Actual Materials Purchased

The total quantity and cost of raw materials bought by a company for production during a specific period.

Standard Price

A predetermined cost assigned to materials, labor, and overhead for budgeting and cost-control purposes.

Actual Cost

The true financial expenditure required to produce a product or service, as opposed to budgeted or standard costs.

Labour Rate Variance

The difference between the actual cost of direct labor and the standard cost of direct labor multiplied by the actual hours worked.