Ceramics Distributing Co

question 32

Multiple Choice

Ceramics Distributing Co. wants to keep its inventory low. Which of the following would be MOST likely to encourage customers to take over more responsibility for the storage function?

• A) setting a skimming price
• B) specifying invoice terms of 2/10, net 30
• C) offering a noncumulative quantity discount
• D) using zone pricing
• E) using F.O.B. shipping point pricing

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Definitions:

Operating Income

The profit realized from a business's core operational activities, excluding deductions of interest and tax.

Unit Selling Price

The amount of money charged for each individual unit of a product or service.

Contribution Margin Ratio

A financial ratio that measures the profitability of a product by subtracting variable costs from sales and dividing the result by total sales.

Operating Income

The profit realized from a business's operations after subtracting operating expenses from gross profit.