The Segmenting of Customers into Several Small Groups Such as Household,institutional,commercial,and

question 19

Multiple Choice

The segmenting of customers into several small groups such as household,institutional,commercial,and industrial users,and establishing a different rate schedule for each group is known as:

• A) first-degree price discrimination
• B) market penetration
• C) third-degree price discrimination
• D) second-degree price discrimination
• E) none of the above

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Definitions:

Overhead Allocation

The process of distributing indirect costs to cost objects such as products, services, or departments.

Departmental Overhead Rate

The allocation of indirect costs to specific departments based on relevant activity bases, such as labor hours or machine hours, to more accurately assign costs.

Direct Labor Hours

The total hours worked by employees directly involved in manufacturing a product or providing a service.

Baking Department

A division within a business that specializes in the preparation and production of baked goods.