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An electronics company sells a range of tablet computers. Tablet computers come complete with an operating system that is regarded as the market leader. The company aims to launch a new version of its hardware every eighteen months and a major update to its software every three years. The latest version of the tablet computer is always sold at a higher price, but the older version that has been replaced is then sold for a time at a discounted price. Which pricing model does this company appear to be using?
A. Penetration and loss leader pricing
B. Penetration and product bundling
C. Skimming and loss leader pricing
D. Skimming and product bundling
ANSWER : D
A company is classifying its quality costs to prepare a quality cost report. Which of the following are conformance costs? Select ALL that apply.
A. Internal Failure Costs
B. External Failure Costs
C. Prevention Costs
D. Appraisal Costs
ANSWER : C,D
Which of the following would change if the cost of capital of a proposed project was increased?
A. Internal rate of return
B. Payback period
C. Accounting rate of return
D. Net present value
ANSWER : D
Division A and Division B are divisions of the same group. Division A transfers all of its output
to Division B.
Which THREE of these alternative transfer pricing bases will prevent any cost inefficiencies in Division A being passed on to Division B?
A. Standard variable cost
B. Actual full cost
C. Actual prime cost
D. Market price
E. Actual variable cost
F. Standard variable cost plus a profit margin
ANSWER : A,D,F
In accordance with a just-in-time (JIT) philosophy, which of the following is regarded as a value added activity?
A. Inspecting raw material deliveries
B. Moving work in progress around production facilities
C. Holding inventory
D. Dispatching products to customers
ANSWER : D