Explain the Psychology Behind a Price of $9

question 79

Essay

Explain the psychology behind a price of $9.99 instead of $10.00.

Know the accounting treatments for interest and dividends received from investments.

Recognize the effect of foreign exchange rates on international investments.

Understand the concept of empathy and its importance in communication.

Identify strategies for effectively delivering bad news in business communication.

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Definitions:

Step-Down Method

A cost allocation method used in managerial accounting that allocates service department costs to other parts of an organization, including production departments.

Service Department Costs

Expenses incurred by support departments within a company, such as maintenance and administration, which do not directly produce goods or services but are necessary for operations.

Direct Method

A way of allocating service department costs directly to producing departments without any intermediate allocations, typically used in cost accounting.

Interdepartmental Services

Services provided between different departments within an organization, facilitating internal operations and support.