A Company That Specializes in Pool and Spa Installations Plans

question 56

Multiple Choice

A company that specializes in pool and spa installations plans to buy TV commercial time during a home improvement program on a local TV station.The company has learned the show has a rating of 20,reaches 10,000 people in the primary target audience,and a 30-second spot costs $700.What is the cost per rating point (CPP) ?

• A) $10
• B) $20
• C) $35
• D) $50
• E) $70

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Definitions:

Product Mix

The variety of products that a company produces or sells, considering the diversity in type, size, and quality.

Prime Cost

The sum of direct materials and direct labor costs associated with the production of goods.

Manufacturing Overhead

Indirect costs associated with manufacturing, such as utilities, maintenance, and factory equipment depreciation, not directly tied to specific units of product.

Fixed Portion

The segment of total costs that does not change with changes in the activity level.