During the Introduction Stage of the Product Life Cycle, A(n)

question 230

Multiple Choice

During the introduction stage of the product life cycle, a(n) _________ strategy may be used.This pricing strategy charges a high price to recoup the costs of product development as well as capitalize on the price insensitivity of early buyers.

• A)penetration pricing
• B)cost-plus pricing
• C)ROI pricing
• D)market-oriented pricing
• E)skimming pricing

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Definitions:

Variable Overhead Rate Variance

The difference between the actual variable overhead incurred and the standard cost allocated, based on the actual activity levels.

Manufacturing Overhead

All manufacturing costs except direct materials and direct labor.

Standard Cost System

A cost accounting system that utilizes standard costs for material, labor, and overhead to estimate the cost of goods produced or services rendered.

Variable Overhead Rate Variance

This refers to the difference between what the variable overhead costs were expected to be versus what they actually were, measured against the standard cost of production.