When a Firm Divides Its Selling Territory into Geographic Areas

question 283

Multiple Choice

When a firm divides its selling territory into geographic areas, it is referred to as

• A) single-zone pricing.
• B) multiple-zone pricing.
• C) geographic pricing.
• D) FOB origin pricing.
• E) basing-point pricing.

---

Definitions:

Manufacturing Overhead-Applied

Indirect costs related to manufacturing that are assigned to products based on a predetermined rate.

Overhead Applied Rate

A rate calculated to allocate indirect costs to cost objects based on a predetermined formula.

Direct Labor Hours

The total time workers or employees spend directly working on goods or services that are being produced.

Work-in-Process Inventory

Inventory that includes materials that are currently in the process of being fabricated into finished goods.