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Home  arrow Student Resources  arrow Chapter 5: Costing and pricing in a competitive environment  arrow Multiple choice questions

Multiple choice questions

Try the multiple choice questions below to test your knowledge of this chapter. Once you have completed the test, click on 'Submit Answers for Grading' to get your results.

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This activity contains 10 questions.

Question 1.
At what point is profit maximised?


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End of Question 1


Question 2.
What is the name of the costing approach used where efforts are made to reduce the unit manufacturing costs of a particular product below the unit cost in the previous period?


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End of Question 2


Question 3.

What is the validity of the following statements?

(1) Marginal pricing should be regarded as a short-term approach to pricing.

(2) Penetration pricing exploits the notion that the market can be stratified according to resistance to price.

 
Statement
 
(1)
(2)
A
True
True
B
True
False
C
False
True
D
False
False

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End of Question 3


Question 4.

What is the validity of the following statements?

(1) Elastic demand tends to be associated with commodities that are not essential.

(2) Cost-plus pricing is less relevant for price makers than price takers.

 
Statement
 
(1)
(2)
A
True
True
B
True
False
C
False
True
D
False
False

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End of Question 4


Question 5.

What is the validity of the following statements?

(1) Activity-based costing is not particularly relevant for service industry businesses.

(2) Activity-based costing is an alternative to full costing.

 
Statement
 
(1)
(2)
A
True
True
B
True
False
C
False
True
D
False
False

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End of Question 5


Question 6.

What is the validity of the following statements?

(1) Activity-based costing sees overheads as rendering a service to cost units.

(2) Activity-based costing views direct labour hours as the most important cost driver.

 
Statement
 
(1)
(2)
A
True
True
B
True
False
C
False
True
D
False
False

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End of Question 6


Question 7.
What is the name of the costing approach used where the product’s selling price is identified and ways are established of meeting production costs and making an acceptable profit?


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End of Question 7


Question 8.
A pricing strategy that seeks to exploit the notion that the market can be stratified according to resistance to price is known as:


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End of Question 8


Question 9.
In activity-based costing, overhead costs are allocated into:


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End of Question 9


Question 10.
Activity-based costing seeks to identify suitable:


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End of Question 10





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