Which of These Is True About a Pair of $200

question 31

Multiple Choice

Which of these is true about a pair of $200 designer denim jeans?

• A)The labor to make them comprises the largest percentage of the final price.
• B)The marketer must cover all of its operating costs while earning a profit.
• C)The specialty retailers that sell them account for only 25% of the cost so that the jeans can experience demand pull.
• D)The contract manufacturer for the jeans receives the least percentage of the final price.
• E)Material suppliers for designer denim jeans take the largest percentage of the final price

---

Definitions:

Operating Departments

Departments within an organization that are directly involved in carrying out its primary activities or business operations.

Allocating Costs

The process of distributing expenses among various departments, products, or services based on predetermined criteria.

Service Departments

Divisions within a company that provide support and services to other departments rather than directly generating revenue.

Indirect Expenses

Costs that are not directly associated with the production of goods or services but necessary for the business to operate, like rent and utilities.