When the Activity Measure Is the Number of Units Sold

question 125

True/False

When the activity measure is the number of units sold, the revenue variance is unfavorable if the average actual selling price is less than expected.

Recognize different pricing approaches and their strategic intentions (e.g., prestige, target, price lining).

Identify how pricing strategies impact market share and appeal to different consumer segments.

Distinguish between demand-oriented, cost-oriented, profit-oriented, and competition-oriented pricing approaches.

Analyze the role of pricing in positioning a product in the market (e.g., high-quality image).

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Definitions:

Net Cash

The difference between the cash inflows and outflows in a given period, indicating the net change in a company's cash position.

Financing Activities

Transactions that result in changes in the size and composition of the equity and borrowings of a company, as reflected in its cash flows.

Free Cash Flow

The amount of cash a company produces through its operations, after subtracting the cost of expenditures on assets.

Net Cash

The difference between a company’s total cash inflows and cash outflows in a given period.