Using Full Costs for Pricing Decisions Can Be Justified in Which

question 79

Multiple Choice

Using full costs for pricing decisions can be justified in which of the following circumstances?

• A)When a firm enters into a long-term contractual relationship to supply a product.
• B)For development and production of customized products and contracts with the government.
• C)When managers initially set prices to cover full costs plus a profit then adjust to reflect market conditions.
• D)All of the answers are correct.

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Definitions:

Driveshaft

An assembly of one or more propeller shafts (hollow tubes) connected by universal joints (U-joints) to driven driveline components. In a typical tandem drive highway tractor, driveshafts are used to transmit torque from the transmission and forward differential carrier and between the two differential carriers.

Dynamically Balance

The process of balancing a rotating component while it is in motion to minimize vibrations and ensure smooth operation.

Transmission

A mechanical system in vehicles that transfers power from the engine to the drive axle, modulating engine output through various gear ratios.

Differential Carrier

The housing that contains the differential gearbox, supporting the ring gear and differential bearings.