GameCube Video Game Console Was Launched with an Introductory Price

question 13

Multiple Choice

GameCube video game console was launched with an introductory price of $199.95,which was quite low for products of this category.The reasoning behind this low pricing was that the GameCube manufacturer expected competition to move in rapidly.Identify the pricing policy used here.

• A) Penetration policy
• B) Markdown policy
• C) Skimming policy
• D) Going-rate policy

---

Definitions:

Fixed Manufacturing Overhead

Costs associated with production that do not change with the level of output, such as rent, salaries, and equipment depreciation.

Budget Variance

Budget variance is the difference between the budgeted or planned amount of expense or revenue and the actual amount incurred or earned.

Standard Cost System

An accounting framework where predetermined costs are used for valuing inventories and measuring cost variances.

Volume Variance

Volume variance reflects the difference between the expected number of units produced or sold and the actual units produced or sold, impacting costs and revenue.