In Order to Achieve an Optimum Price for the Product

question 19

Multiple Choice

In order to achieve an optimum price for the product in an international market, which of the following pricing methods should a firm use?

• A) cost-plus pricing
• B) marketplace pricing
• C) full-cost recovery
• D) marginal cost recovery
• E) options A and B in combination

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Definitions:

Factory Overhead Cost Variance

The difference between the actual factory overhead costs incurred and the expected (or budgeted) overhead costs based on standard cost accounting.

Flexible Factory Overhead Budget

A budget that adjusts overhead costs in response to changes in actual production or activity, allowing for more accurate costing.

Direct Materials Price Variance

The difference between the actual price and the standard price of direct materials multiplied by the actual quantity of direct materials used in producing a product.

Units

In business and accounting, units refer to the individual pieces or quantities of a product or service.