Important Information
Which of the following is important when making decisions?
A) Costs that are already spent
B) Past costs
C) Costs that stay the same
D) Future costs that change between options
D) Future costs that change between options
A company that follows market prices uses what pricing method?
A) Target pricing
B) Cost-plus pricing
C) Discount pricing
D) Dynamic pricing
A) Target pricing
Before removing a product, what should a company check?
A) If the product makes more money than it costs
B) How much was spent to create the product
C) The prices of similar products from competitors
D) If the CEO likes the product
A) If the product makes more money than it costs
What is important when deciding whether to outsource?
A) The company’s past profits
B) The cost of making something in-house vs. outsourcing
C) The CEO’s travel expenses
D) The company’s total yearly sales
B) The cost of making something in-house vs. outsourcing
What should a company check before deciding to process a product further?
A) The original cost of materials
B) Whether the extra cost is worth the extra revenue
C) How much the equipment has lost value
D) The past selling price of similar products
B) Whether the extra cost is worth the extra revenue
Which of these does NOT matter when making business decisions?
A) Fixed costs that change with production
B) The cost of missing out on another option
C) Costs that were paid in the past
D) The money made from each sale
C) Costs that were paid in the past
Which of these is NOT something managers think about when setting prices?
A) How much profit they want
B) How much customers are willing to pay
C) How often workers quit at a competing company
D) If the company controls prices or follows the market
C) How often workers quit at a competing company
If a company has limited resources, how should it decide what to produce?
A) Make the product with the highest price
B) Make the product that makes the most money per limited resource
C) Make the product with the lowest cost
D) Make equal amounts of all products
B) Make the product that makes the most money per limited resource
What is a possible benefit of outsourcing?
A) Less control over product quality
B) Higher fixed costs
C) Avoiding the cost of using company resources
D) Happier employees
C) Avoiding the cost of using company resources
A company is deciding whether to process a product further. What is a "joint cost"?
A) The cost of extra packaging
B) The cost of marketing
C) The cost of selling after processing
D) The cost before the decision point
D) The cost before the decision point
Which of these is an important non-money factor in short-term decisions?
A) Equipment losing value
B) Employee happiness
C) The original cost of equipment
D) How much old inventory is left
B) Employee happiness
When offering special prices, what is the most important thing to consider?
A) How fixed costs are divided
B) The competitor’s marketing plan
C) The company’s brand name
D) Whether the company has extra production space
D) Whether the company has extra production space
Which of these is the LEAST important when deciding to remove a product?
A) If fixed costs will still exist after removing the product
B) If removing it affects other product sales
C) If customers feel emotionally attached to the product
D) If the resources can be used for something else
C) If customers feel emotionally attached to the product
When should a company NOT outsource?
A) If it can use its extra space for a new product
B) If outsourcing costs a little less than making in-house
C) If outsourcing is a popular trend
D) If the supplier offers good payment terms
A) If it can use its extra space for a new product
When should a product be processed further instead of sold as is?
A) If extra processing costs more than the extra revenue
B) If the product has a well-known brand
C) If extra processing costs less than the extra revenue
D) If the company has extra marketing budget
C) If extra processing costs less than the extra revenue