Which Product Pricing Factor Is Primarily Used by the Majority

question 21

Multiple Choice

Which product pricing factor is primarily used by the majority of American companies?

• A)Market-based
• B)Cost-based
• C)Quality-based
• D)Quantity-based

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Definitions:

Overapplication of Overhead

The situation where the allocated manufacturing overhead costs exceed the actual overhead costs incurred during a period.

Machine Hours

A measure of the time a machine is in operation, used in cost accounting to allocate machine costs to products.

Overhead Applied

The allocation of estimated overhead costs to specific jobs or production units during an accounting period.

Direct Labor Cost

The wages and related benefits of employees who are directly involved in the production of goods or services.