Which of the Following Is Not True When Determining the Selling

question 115

Multiple Choice

Which of the following is not true when determining the selling price for a product?

• A) Absorption costing should be used to determine routine pricing which include both fixed and variable costs.
• B) As long as the selling price is set above the variable costs, the company will make a profit in short run.
• C) Variable costing is effective when determining short run decisions, but absorption costing is only used for long-term pricing policies.
• D) Both variable and absorption pricing plans should be considered, to include several pricing alternatives.

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Definitions:

GDP Deflator

An economic metric that converts output measured at current prices into constant-dollar output by adjusting for inflation.

Nominal GDP

Gross Domestic Product measured in current prices without adjusting for inflation, representing the total value of all goods and services produced over a specific time period within a country's borders.

Real GDP

The calculation of a nation's total economic production factoring in adjustments for price fluctuations, either inflationary or deflationary.

Growth Rate

The measure of the increase in a particular variable, such as GDP or population size, over a specific period of time, usually expressed as a percentage.