Companies Frequently Offer a Reduction from the Base Price to Customers

question 122

Multiple Choice

Companies frequently offer a reduction from the base price to customers who pay immediately, or within a specified time period. What is this called?

• A)a quantity discount
• B)a base discount
• C)a cash discount
• D)a promotional discount

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Definitions:

Quantity Standard

A predetermined measure of the quantity of inputs expected to be used in the production of goods or services, used for budgeting and performance evaluation.

Standard Cost System

An accounting system that uses predetermined costs for products and services to help managers control costs by comparing them with actual costs.

Raw Materials

The basic materials and components required to start the production process.

Standard Cost Card

A detailed listing of the standard amounts of inputs and their costs that are required to produce a unit of a specific product.