Customers Are Likely to Be Less Price Sensitive When

question 162

Multiple Choice

Customers are likely to be less price sensitive when:

• A) the greater the total expenditure.
• B) the greater their share of the cost.
• C) the greater the significance of the end benefit.
• D) the easier it is to compare prices.
• E) None of the above.

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Definitions:

Allocation Rate

A financial metric used to assign indirect costs to different projects or departments within an organization.

Total Overhead

The total of all indirect costs associated with the manufacturing process, including indirect labor, materials, and other expenses necessary for production.

Overhead Allocation

The process of distributing overhead costs to produced goods based on a predetermined method, often reflecting the usage of resources in production.

High-Volume Products

Products that are produced or sold in large quantities, usually characterized by lower per-unit costs due to economies of scale.