Holding All Other Things Constant, an Increase in How Sensitive

question 80

Multiple Choice

Holding all other things constant, an increase in how sensitive customers are to price would affect:

• A)the markup under the absorption costing approach to cost-plus pricing.
• B)the markup used to compute the profit-maximizing price.
• C)both the markup under the absorption costing approach to cost-plus pricing and the markup used to compute profit-maximizing price.
• D)neither the markup under the absorption costing approach to cost-plus pricing nor the markup used to compute profit-maximizing price.

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Definitions:

High Differentiation

A situation in organizations where there is a large variance in the nature of roles, responsibilities, and levels of authority.

Organizational Units

Subdivisions within an organization, defined by their specific functions, responsibilities, and roles.

Functional Departmentation

Employees with closely related skills and responsibilities are assigned to the same department.

Product Departmentation

Departments are formed on the basis of a particular product, product line, or service.