Which of the Following Statements Is True

question 171

Multiple Choice

Which of the following statements is true?

• A) Companies are price-takers when their products are unique.
• B) Companies are price-setters for a product when there is intense competition.
• C) Companies are price-takers for a product when the pricing approach emphasizes cost-plus pricing.
• D) Companies are price-takers when they have little or no control over the prices of their products or services.

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Definitions:

Indirect Cost

A cost that cannot be easily and conveniently traced to a specified cost object.

Predetermined Overhead Rate

A rate used to apply manufacturing overhead to products or job orders, calculated before the period begins based on estimated costs.

Machine-Hours

A measure of the amount of time that a machine is operated, used as a basis for allocating manufacturing overhead.

Variable Manufacturing Overhead

The portion of overhead costs that varies with production volume, including utilities and indirect labor expenses related to manufacturing.