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Managerial Accounting Tools for Business Decision Making 7th Edition Test Bank

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  • ISBN-10 ‏ : ‎ 9781118334331
  • ISBN-13 ‏ : ‎ 978-1118334331

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SKU:tb1002205

Managerial Accounting Tools for Business Decision Making 7th Edition Test Bank

CHAPTER 8
PRICING
SUMMARY OF QUESTIONS BY OBJECTIVES AND BLOOM’S TAXONOMY
Item LO BT Item LO BT Item LO BT Item LO BT Item LO BT
True-False Statements
1. 1 C 6. 2 C 11. 3 K 16. 4 K a21. 5 C
2. 1 K 7. 2 C 12. 4 K 17. 4 C a22. 5 K
3. 1 K 8. 3 K 13. 4 K 18. 4 K a23. 5 K
4. 2 K 9. 3 K 14. 4 C a19. 5 K a24. 6 K
5. 2 C 10. 3 K 15. 4 C a20. 5 C a25. 6 C
Multiple Choice Questions
26. 1 K 50. 2 AP 74. 3 AP 98. 4 AP 122. 4 AP
27. 1 K 51. 2 AP 75. 3 AP 99. 4 AP 123. 4 AP
28. 1 K 52. 2 AP 76. 3 AP 100. 4 AP 124. 4 AP
29. 1 C 53. 2 AP 77. 3 AP 101. 4 AP a125. 5 C
30. 1 C 54. 2 C 78. 3 AP 102. 4 AP a126. 5 K
31. 1 K 55. 2 C 79. 3 AP 103. 4 AP a127. 5 K
32. 1 K 56. 2 K 80. 3 AP 104. 4 AP a128. 5 K
33. 1 K 57. 2 K 81. 3 K 105. 4 AP a129. 5 K
34. 1 K 58. 2 C 82. 3 K 106. 4 AP a130. 5 K
35. 1 C 59. 2 AP 83. 3 K 107. 4 C a131. 5 K
36. 1 AP 60. 2 AP 84. 3 AP 108. 4 K a132. 5 C
37. 1 AP 61. 2 C 85. 3 AP 109. 4 K a133. 5 K
38. 1 AP 62. 2 K 86. 3 AP 110. 4 C a134. 5 K
39. 1 AP 63. 2 AP 87. 4 K 111. 4 K a135. 5 K
40. 1 AP 64. 2 AP 88. 4 K 112. 4 C a136. 5 C
41. 2 K 65. 3 K 89. 4 K 113. 4 K a137. 5 AP
42. 2 K 66. 3 K 90. 4 C 114. 4 C a138. 5 AP
43. 2 AP 67. 3 C 91. 4 AP 115. 4 K a139. 5 AP
44. 2 AP 68. 3 C 92. 4 K 116. 4 C a140. 5 AP
45. 2 AP 69. 3 K 93. 4 K 117. 4 C a141. 5 AP
46. 2 AP 70. 3 AP 94. 4 K 118. 4 K a142. 5 AP
47. 2 AP 71. 3 AP 95. 4 K 119. 4 C a143. 5 AP
48. 2 AP 72. 3 AP 96. 4 K 120. 4 K a144. 6 AP
49. 2 AP 73. 3 K 97. 4 C 121. 4 AP a145. 6 AP
Brief Exercises
146. 1 AP 149. 2 AP 152. 3 AP 155. 4 AP a158. 5 AP
147. 2 AP 150. 2 AP 153. 3 AP 156. 4 AP a159. 5 AP
148. 2 AP 151. 2 AP 154. 3 AP 157. 4 AP
Exercises
160. 1 AP 164. 2 AP 168. 3 AP 172. 4 AN a176. 5 AP
161. 1 AP 165. 2 AP 169. 3 AP 173. 4 AN a177. 5 AP
162. 1 AP 166. 2 AP 170. 4 AN 174. 4 AN
163. 2 AP 167. 3 AP 171. 4 AN 175. 4 AN
a This question covers a topic in an Appendix to the chapter.

Completion Statements
178. 1 K 180. 2 K 182. 4 K 184. 4 K a186. 5 K
179. 2 K 181. 3 K 183. 4 K 185. 4 K a187. 6 K

SUMMARY OF LEARNING OBJECTIVES BY QUESTION TYPE
Item Type Item Type Item Type Item Type Item Type Item Type Item Type
Learning Objective 1
1. TF 27. MC 31. MC 35. MC 39. MC 161. Ex
2. TF 28. MC 32. MC 36. MC 40. MC 162. Ex
3. TF 29. MC 33. MC 37. MC 146. BE 178. C
26. MC 30. MC 34. MC 38. MC 160. Ex
Learning Objective 2
4. TF 43. MC 49. MC 55. MC 61. MC 149. BE 166. Ex
5. TF 44. MC 50. MC 56. MC 62. MC 150. BE 179. C
6. TF 45. MC 51. MC 57. MC 63. MC 151. BE 180. C
7. TF 46. MC 52. MC 58. MC 64. MC 163. Ex
41. MC 47. MC 53. MC 59. MC 147. BE 164. Ex
42. MC 48. MC 54. MC 60. MC 148. BE 165. Ex
Learning Objective 3
8. TF 66. MC 71. MC 76. MC 81. MC 86. MC 168. Ex
9. TF 67. MC 72. MC 77. MC 82. MC 152. BE 169. Ex
10. TF 68. MC 73. MC 78. MC 83. MC 153. BE 181. C
11. TF 69. MC 74. MC 79. MC 84. MC 154. BE
65. MC 70. MC 75. MC 80. MC 85. MC 167. BE
Learning Objective 4
12. TF 89. MC 98. MC 107. MC 116. MC 155. BE 182. C
13. TF 90. MC 99. MC 108. MC 117. MC 156. BE 183. C
14. TF 91. MC 100. MC 109. MC 118. MC 157. BE 184. C
15. TF 92. MC 101. MC 110. MC 119. MC 170. Ex 185. C
16. TF 93. MC 102. MC 111. MC 120. MC 171. Ex
17. TF 94. MC 103. MC 112. MC 121. MC 172. Ex
18. TF 95. MC 104. MC 113. MC 122. MC 173. Ex
87. MC 96. MC 105. MC 114. MC 123. MC 174. Ex
88. MC 97. MC 106. MC 115. MC 124. MC 175. Ex
Learning Objective 5a
19. TF 125. MC 130. MC 135. MC 140. MC 159. BE
20. TF 126. MC 131. MC 136. MC 141. MC 176. Ex
21. TF 127. MC 132. MC 137. MC 142. MC 177. Ex
22. TF 128. MC 133. MC 138. MC 143. MC 186. C
23. TF 129. MC 134. MC 139. MC 158. BE
Learning Objective 6a
24. TF 25. TF 144. MC 145. MC 187. C
Note: TF = True-False BE = Brief Exercise C = Completion
MC = Multiple Choice Ex = Exercise
The chapter also contains one set of eight Matching questions and two Short-Answer Essay questions.

CHAPTER LEARNING OBJECTIVES
1. Compute a target cost when the market determines a product price. To compute a target cost, the company determines its target selling price. Once the target selling price is set, it determines its target cost by setting a desired profit. The difference between the target price and desired profit is the target cost of the product.

2. Compute a target selling price using cost-plus pricing. Cost-plus pricing involves establishing a cost base and adding to this cost base a markup to determine a target selling price. The cost-plus pricing formula is expressed as follows: Target selling price = Cost + (Markup percentage × Cost).

3. Use time-and-material pricing to determine the cost of services provided. Under time-and-material pricing, two pricing rates are set—one for labor used on a job and another for the material. The labor rate includes direct labor time and other employee costs. The material charge is based on the cost of direct parts and materials used and a material loading charge for related overhead cost.

4. Determine a transfer price using the negotiated, cost-based, and market-based approaches. The negotiated price is determined through agreement of division managers. Under a cost-based approach, the transfer price may be based on variable cost alone or on variable cost plus fixed costs. Companies may add a markup to these numbers. The cost-based approach often leads to poor performance evaluations and purchasing decisions. A market-based transfer price is based on existing competing market prices and services. A market-based system is often considered the best approach because it is objective and generally provides the proper economic incentives.

*5. Determine prices using absorption-cost pricing and variable-cost pricing. Absorption-cost pricing uses total manufacturing cost as the cost base and provides for selling and administrative costs plus the target ROI through the markup. The target selling price is computed as: Manufacturing cost per unit + (Markup percentage × Manufacturing cost per unit). Variable-cost pricing uses all of the variable costs, including selling and administrative costs, as the cost base and provides for fixed costs and target ROI through the markup. The target selling price is computed as: Variable cost per unit + (Markup percentage × Variable cost per unit).

 

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