When Can a Firm Justify the Use of Full Costs

question 168

Multiple Choice

When can a firm justify the use of full costs for pricing decisions?

• A)when a firm enters into a short term contractual relationship to supply a product.
• B)for development and production of standardized products.
• C)when managers initially set prices to cover full costs plus a profit then adjust to reflect market conditions.
• D)because they are required by generally accepted accounting principles.

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Definitions:

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Responses characterized by intense feelings that are generated in response to an internal or external event.

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The state of being in a trance, often induced by another person, characterized by heightened suggestibility and focus.

Hypnosis

A trance-like state in which a person has heightened focus, concentration, and suggestibility.