Sandy Tappan Owns an Automobile Detailing Business Called Sizzlin' Shine

question 72

Multiple Choice

Sandy Tappan owns an automobile detailing business called Sizzlin' Shine.Her goal is to outperform other auto shops by specializing in detailing services.Her shop doesn't do any mechanical or collision repair work.Tappan prices her detailing service higher than her competition because she uses only the best materials,and they cost more than the materials used by her competitors.Her goal is to maximize profits.
-Refer to Sizzlin' Shine.Tappan's pricing objective for Sizzlin' Shine is best characterized as which of the following?

• A) quality-oriented
• B) revenue-oriented
• C) patronage-oriented
• D) operations-oriented

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Definitions:

Activity-based Costing

A method of costing that identifies individual activities as fundamental cost objects and assigns costs to them based on their use of resources.

Idle Capacity

Represents the condition where production resources are not used to their full potential, resulting in unutilized capacity.

Plantwide Overhead Rate

A single overhead absorption rate used throughout a manufacturing plant to allocate overhead costs to products.

Activity-based Costing

A costing method that allocates overhead and indirect costs to specific activities, providing a more accurate representation of the costs associated with producing a product.