Which of the Following Statements About Geographical Adjustments to Price

question 245

Multiple Choice

Which of the following statements about geographical adjustments to price is most accurate?

• A)In FOB origin pricing,the seller selects the mode of transportation.
• B)In FOB with freight-allowed pricing,the seller must pay for all transportation costs.
• C)Multiple-zone pricing is sometimes referred to as "spider web" pricing.
• D)Basing point pricing seems to have been used in industries where freight expenses are a significant part of the total cost to the buyer.
• E)Geographical adjustments can be subject government regulation if the firm cannot supply objective data (lists of mountains,rivers,weather conditions,etc. )explaining why those adjustments need to be made.

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Definitions:

Work in Process Inventory

Items that are partially completed in the manufacturing process but not yet ready for sale, recorded as current assets on a company's balance sheet.

Finished Goods Inventory

Completed products that are ready to be sold but have not yet been sold to customers.

Product Costs

Costs directly tied to the creation of a product, including raw materials, labor, and manufacturing overhead.

Manufacturing Process

A sequence of operations and processes designed to create a specific product from raw materials or components.