The Decision of Macy's to Use Even Prices Such as $60

question 182

Multiple Choice

The decision of Macy's to use even prices such as $60 for a Ralph Lauren Polo is an application of ____, where ____ prices are often used to _____.

• A) odd-even pricing; even; give a product an upscale or exclusive image
• B) odd-even pricing; odd; show customers products are priced based on tradition
• C) prestige; premium; give a product an upscale or exclusive image
• D) prestige; even; make it easier for consumers to compare
• E) odd-even; even; facilitate comparison to competitors' prices

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Definitions:

Unit Product Cost

The total cost to produce one unit of product, including direct materials, direct labor, and manufacturing overhead.

Common Fixed Expenses

Expenses that remain constant in total amount and are not affected by changes in business activity level, shared across multiple business segments or products.

Business Segments

Parts of a company that can be separately identified by products provided or by geographic markets, allowing for analysis of the different areas of a business.

Variable Costing

An accounting approach that includes only variable production costs - direct materials, direct labor, and variable manufacturing overhead - in product costs, excluding fixed overhead.