A Low-Active Pricing Strategy

question 7

Multiple Choice

A low-active pricing strategy:

• A) emphasizes nonprice competitive factors.
• B) is mainly used to gain margins in small market targets.
• C) is most effective for discount retailers.
• D) is an attractive strategy when competition for market target is high.

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Definitions:

Direct Materials Purchases Variance

The difference between the actual costs of materials purchased and the expected (or standard) costs for the materials used.

Direct Materials

Direct materials are raw materials that are directly traceable to the manufacturing of a product. They are an essential component of the total manufacturing cost of a product.

Variance

The difference between planned or expected performance and actual performance, often analyzed in budgeting and performance management.

Liters

A metric unit of volume equal to 1,000 cubic centimeters, commonly used to measure liquids.