Reference no: EM131148639
Indicate whether each statement is true (T) or false (F).
(T) 1. The three major influences on pricing decisions are customers, competitors, and costs.
(F) 2. A company should accept a one-time only special order when the order's total Contribution margin is positive.
(F) 3. Value engineering is usually constrained by locked-in costs.
(F) 4. The target rate of return on investment for a product is the same as the product's markup as a percentage of its full unit cost.
(T) 5. The cost of preparing an owner's manual and including it in each product package is a value-added cost.
___ 6. One reason managers use the full cost of products as the cost base in their pricing decisions is to promote price stability.
___7. Life-cycle costing highlights manufacturing costs more than the costs of other business functions in the value chain.
___8. When there is price discrimination, pricing is not linked closely to the cost of the product.
___ 9. Under the U.S. Robinson-Patman Act, a manufacturing company cannot price discriminate between two customers if its intent is to lessen or prevent competition.
___ 10. Setting prices above average variable costs is regarded as pricing that is non predatory.
___ 11. Collusive pricing occurs when a nonU.S. Company sells a product in the U.S. at a price below the market value in the country where it is produced, and this lower price materially injures or threatens to materially injure an industry in the U.S.
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