________ Pricing Involves Charging Higher Prices on an Everyday Basis

question 56

Multiple Choice

________ pricing involves charging higher prices on an everyday basis but running frequent promotions to lower prices temporarily on selected items.

• A) High-low
• B) Everyday low
• C) Cost-plus
• D) Break-even
• E) Penetration

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Definitions:

Fixed Overhead

The portion of overhead costs that remains constant regardless of the level of production or business activity, such as rent, salaries, and insurance.

Work in Process

Inventory consisting of items in production that are not yet completed, part of the manufacturing process costs including labor, materials, and overhead.

Direct Materials

Basic substances that can be directly connected to the making of a product and are vital parts of the finished goods.

Direct Labor

The labor directly involved in the manufacturing of a product, which can be easily traced back to that product.