Which of the Following Statements Regarding Cost-Oriented Approaches Is Most

question 221

Multiple Choice

Which of the following statements regarding cost-oriented approaches is most accurate?

• A)These methods focus on the demand side of the pricing problem.
• B)These methods focus on production and marketing expenses.
• C)Target return on investment is an example of a cost-oriented method.
• D)Experience curve pricing is simple to use because costs predictably decrease by 25 percent with each doubling of production.
• E)Cost-oriented approaches are a subcategory of competition-oriented methods.

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Definitions:

Trust Receipts

Trust receipts are documents issued by banks to borrowers indicating that the bank holds the title to imported goods until the loan is repaid.

Collateral

An asset that a borrower offers to a lender as security for a loan, which can be seized if the loan is not repaid.

Accruals

Accounting adjustments for revenues that have been earned or expenses that have been incurred but not yet recorded.

Level of Operations

Refers to the scale of production or business activity, indicating the degree to which a company utilizes its resources.