Question 1

Markup is usually expressed as a percentage of cost.

Accepted Answer

The answer of Markup is usually expressed as a percentage...

Question 2

Yellowknife Inc.is a small manufacturing company located in the far north of Canada.What transportation mode are they most likely to use?

Accepted Answer

Planes

Question 3

Cost-oriented pricing of products takes into account the supply and demand for the product at various prices.

Accepted Answer

Cost-oriented pricing considers the cost of producing the product and adds a markup to determine the price, regardless of supply and demand. Supply and demand-based pricing is known as market-oriented pricing.

Question 4

A good example of cost-oriented pricing is theatre ticket prices for Hollywood films.

Accepted Answer

Cost-oriented pricing involves setting prices based solely on the cost of production and distribution. Theatre ticket prices for Hollywood films are typically based on a combination of factors, including production costs, marketing expenses, and market demand, which do not fall under the traditional definition of cost-oriented pricing.

Question 5

Coke has discovered that it can charge more for a can of soda in the sportswear aisle of Walmart than in the beverage aisle near competing colas.This is an example of a market share pricing objective.

Accepted Answer

This is actually an example of a product-line pricing strategy, where the price of the product is varied based on the location or placement of the product within the store. Market share pricing objective would be more focused on setting a price that would allow the company to gain a larger market share than competitors.

Question 6

A corporation that has an objective of achieving a high market share will almost always have a second objective to maximize profits.

Accepted Answer

A corporation may prioritize market share over profits, especially in the short term, to establish dominance, increase brand recognition, or drive out competitors.

Question 7

GSX Ltd.leases bulk space from other carriers,such as railroads or airlines.It then resells parts of that space to smaller shippers.GSX is a(n)

Accepted Answer

freight forwarder.

Question 8

If total fixed costs are $200 000,the product is sold for $30,and the variable cost is $16,the break-even point is 14 286 units.

Accepted Answer

Using the formula for break-even point:

Break-even point = Fixed costs / (Price - Variable costs)

= $200 000 / ($30 - $16)

= 14 286 units

Question 9

Doreen owns a seafood restaurant in Alberta.She would like to have the freshest seafood possible,so her preferred method of delivery would be

Accepted Answer

plane.

Question 10

Which of the following is correct with regard to the various modes of transportation?

Accepted Answer

Water transportation is the least expensive,but slowest of the various modes.

Question 11

A retail seller of music would like to hit the break-even point as late as possible so profits will be maximized.

Accepted Answer

This statement is false. Maximizing profits would actually mean hitting the break-even point as early as possible, allowing for more sales to generate profit beyond the break-even point. Waiting too long to hit the break-even point could result in missed opportunities for higher profits.

Question 12

All of the following are advantages of plane transportation except

Accepted Answer

reduced shipping costs.

Question 13

Manufacturers who maintain their own transportation delivery system,usually a truck fleet,are known as

Accepted Answer

private carriers.

Question 14

If total fixed costs are $300 000,the product is sold for $20,and the variable cost is $10,the break-even point is 10 000 units.

Accepted Answer

The answer of If total fixed costs are $300 000,the...

Question 15

Maria's Dairy needs a transportation company to haul milk to the processing plant.The transportation company she will most likely contact is a(n)

Accepted Answer

contract carrier.

Question 16

Pricing strategy refers to pricing as a planning activity that affects the marketing mix.

Accepted Answer

Pricing strategy is a deliberate process of deciding the optimal price of a product or service that will help achieve the organization's objectives and affect other elements of the marketing mix, such as product, place, and promotion.

Question 17

There is more subjectivity in the pricing of services than there is in the pricing of physical products.

Accepted Answer

The pricing of services can be subjective and depend on factors such as consumer demand, competitor pricing, and the specific value or expertise of the service provider. On the other hand, the pricing of physical products may be more straightforward as it is often determined by the cost of production and distribution. However, there can still be variability in the pricing of physical products based on factors such as branding and perceived value.

Question 18

In order for a company to be successful,its pricing must cover its fixed costs and its variable costs.

Accepted Answer

Pricing should cover both fixed and variable costs in order for a company to break even and make a profit. Fixed costs include expenses like rent, utilities, and salaries, which do not fluctuate with sales volume, while variable costs include expenses like materials and labor, which increase or decrease with sales volume. By pricing products or services to cover both fixed and variable costs, a company can achieve profitability.

Question 19

A break-even analysis is used to determine how many units must be sold at a given price before the company begins to make a profit.

Accepted Answer

This is correct. The break-even analysis is a calculation of the point at which the company's total revenue equals total cost, resulting in zero profit or loss. By determining the number of units needed to be sold at a given price, the company can determine if their pricing strategy is viable for profitability.

Question 20

The formula for determining the break-even point (in units)is total fixed costs divided by price minus variable cost.

Accepted Answer

This is the correct formula for determining the break-even point in units.

Quiz 17: Pricing and Distributing Goods and Services