Question 1

Central Ice Machine Company is located in Omaha,Nebraska and sells Frick,Sullair,York,and Fes Fuller ammonia refrigeration parts.The company ships these parts using FOB origin pricing.Which of the following statements about the shipment of a Frick reciprocating compressor is true?

Accepted Answer

FOB origin pricing means the buyer is responsible for shipping costs from the seller's location. Therefore, a buyer further away, like in Albany, New York, will pay more in shipping charges than a closer buyer, like in Lincoln, Nebraska.

Question 2

method of pricing where the price the seller quotes includes only the cost of loading the product onto the vehicle and specifies the name of the location where the loading is to occur is referred to as

Accepted Answer

FOB stands for "Free on Board," a term used in shipping and logistics. FOB origin pricing means that the buyer is responsible for all transportation costs and assumes ownership of the goods as soon as they are loaded onto the vehicle at the seller's location. The price quoted by the seller only includes the cost of loading, and the buyer is responsible for all other costs associated with shipping the product to its final destination.

Question 3

company placing an order from the Lab Safety Supply catalog is instructed to add $25.00 to the total cost of the order to pay for shipping.Which method of shipping does this catalog supplier use?

Accepted Answer

Lab Safety Supply uses single-zone pricing, as they charge a flat fee for shipping regardless of the destination. FOB origin pricing would mean the buyer is responsible for shipping costs from the point of origin, multiple-zone pricing would charge different rates based on the destination zone, freight absorption pricing would absorb shipping costs into the product price, and basing-point pricing would charge different rates based on the location of the supplier.

Question 4

fashion buyer for Neiman Marcus is in Italy to view the new collections and to order for the coming season.In Milan,she negotiates a good price for a quantity of shoes in a range of sizes and styles,FOB factory.This means that

Accepted Answer

FOB factory means that the title of the goods passes from the factory to Neiman Marcus at the point of loading, which means that Neiman Marcus is responsible for any damage while the shoes are in transit. Additionally, the factory selects the mode of transportation, but Neiman Marcus pays the freight charges.

Question 5

Geographical Pricing Map A
-According to the Geographical Pricing Map A above,if the plant in Denver charges $20 to ship its products to all of the identified cities,it is most likely using which type of pricing?

Accepted Answer

Geographical Pricing Map A shows a single zone with equal rates for all cities. This is an example of single-zone pricing where the same price is charged for all destinations within a defined geographic area.

Question 6

acronym "FOB" stands for __________.

Accepted Answer

FOB stands for "free on board," which indicates that the seller is responsible for the cost of shipping and loading the goods onto a carrier at the point of origin. The buyer assumes responsibility for the goods and transportation costs from that point on.

Question 7

two general methods for quoting prices related to transportation costs are FOB origin pricing and __________.

Accepted Answer

Uniform delivered pricing is a method where the seller includes transportation costs in the price, regardless of the buyer's location, contrasting with FOB origin pricing where the buyer pays for transportation.

Question 8

Uniform delivered pricing refers to

Accepted Answer

Uniform delivered pricing refers to the price the seller quotes that includes all transportation costs, hence option A is the correct choice.

Question 9

Which of the following statements about geographical adjustments to price is most accurate?

Accepted Answer

In FOB with freight-allowed pricing, the buyer is allowed to deduct transportation costs from the list price, effectively making the seller responsible for the freight costs.

Question 10

Geographical Pricing Map A
-Multiple-zone pricing refers to

Accepted Answer

Multiple-zone pricing refers to a firm's division of its selling territory into geographic areas or zones and charging different prices for each zone. This approach recognizes that customers in different areas may have different levels of willingness to pay and also allows the firm to tailor pricing strategies to each zone based on factors such as competition or transportation costs. Option A refers to establishing distribution centers, while option B refers to establishing retail outlets. Option C refers to one-price-for-all pricing, while option E refers to using multiple carriers for transportation flexibility.

Question 11

price the seller quotes that includes all transportation costs is referred to as __________.

Accepted Answer

Uniform delivered pricing is a pricing method where the seller includes all transportation costs in the quoted price. This simplifies the buying process and allows for a straightforward comparison of prices among suppliers. FOB origin and destination pricing refer to whether the seller or buyer is responsible for transportation costs, while mode of transportation and geographical allowance are not relevant to this pricing method.

Question 12

pricing method where all buyers pay the same delivered price for the products,regardless of their distance from the seller,is referred to as __________.

Accepted Answer

Single-zone pricing is a method where all buyers pay the same delivered price for the products, irrespective of the distance from the seller. This pricing method is often used when the seller operates in a single location or has only one warehouse. It helps to simplify the pricing process and is easy to understand for both the seller and the buyer. This pricing method also helps the seller to stay competitive with other businesses in the same geographical area.

Question 13

Geographical Pricing Map A
-a firm divides its selling territory into geographic areas,it is referred to as

Accepted Answer

The answer of  Geographical Pricing Map A
-a firm divides...

Question 14

uniform delivered pricing,the price the seller quotes

Accepted Answer

Uniform delivered pricing means that the price quoted by the seller includes all transportation costs. This pricing strategy is also known as freight-on-board (FOB) destination, where the seller is responsible for the goods until they are delivered to the buyer's location. Therefore, the seller includes transportation costs in the price to ensure that the buyer is aware of the total cost of the product.

Question 15

Which of the following statements about geographical adjustments to price is most accurate?

Accepted Answer

Basing point pricing has been used in industries where freight expenses are a significant part of the total cost to the buyer and products are largely undifferentiated. Option A is incorrect because in FOB origin pricing, the seller is responsible for all transportation costs until the goods are loaded onto the shipping vessel. Option B is incorrect because in FOB with freight-allowed pricing, the seller pays for transportation costs until the goods reach the port of destination, after which the buyer is responsible for all costs. Option C is incorrect because multiple-zone pricing is typically used to provide different pricing to customers in different locations, with each location considered a separate zone, and is not referred to as "spider web" pricing. Option E is incorrect because geographical adjustments are generally not subject to government regulation unless they involve discriminatory or unfair practices.

Question 16

method of pricing where the price the seller quotes includes all transportations costs and the seller retains title to the goods until delivered to the buyer,thereby assuming responsibility for any damage that may occur,is referred to as

Accepted Answer

The answer of method of pricing where the price the...

Question 17

word "Free" in relation to the acronym "FOB" signals the point or location where the seller is

Accepted Answer

The term "Free" in the acronym FOB refers to the point at which the seller is free to choose the point of loading. This means that the seller has fulfilled their responsibility once they have loaded the goods onto the designated means of transportation at the chosen point. The responsibility for any damage or loss to the goods is then transferred to the buyer. The seller is not necessarily free to choose the method of transportation or payment, as these details should be negotiated in the contract between the buyer and seller.

Question 18

cruise lines pay the customer's airfare to the point of cruise departure.What type of price adjustment are the cruise lines using?

Accepted Answer

The answer of cruise lines pay the customer's airfare to...

Question 19

origin pricing refers to

Accepted Answer

Origin pricing refers to a method of pricing where the price the seller quotes includes only the cost of loading the product onto the vehicle and specifies the name of the location where the loading is to occur (the seller's warehouse or factory, for example). It does not include transportation costs or taxes and tariffs.

Question 20

two general methods for quoting prices related to transportation costs are uniformed delivered pricing and __________.

Accepted Answer

The two general methods for quoting prices related to transportation costs are uniform delivered pricing and FOB (Free On Board) pricing. FOB origin pricing means the buyer is responsible for the transportation costs from the point of origin, while uniform delivered pricing means the seller includes transportation costs in the quoted price. Regional pricing, flexible pricing, and mode of transportation pricing are not commonly used methods for quoting prices related to transportation costs.

Quiz 14: Arriving at the Final Price

Central Ice Machine Company is located in Omaha,Nebraska and sells Frick,Sullair,York,and Fes Fuller ammonia refrigeration parts.The company ships these parts using FOB origin pricing.Which of the following statements about the shipment of a Frick reciprocating compressor is true?

method of pricing where the price the seller quotes includes only the cost of loading the product onto the vehicle and specifies the name of the location where the loading is to occur is referred to as

company placing an order from the Lab Safety Supply catalog is instructed to add $25.00 to the total cost of the order to pay for shipping.Which method of shipping does this catalog supplier use?

fashion buyer for Neiman Marcus is in Italy to view the new collections and to order for the coming season.In Milan,she negotiates a good price for a quantity of shoes in a range of sizes and styles,FOB factory.This means that

Geographical Pricing Map A -According to the Geographical Pricing Map A above,if the plant in Denver charges $20 to ship its products to all of the identified cities,it is most likely using which type of pricing?

acronym "FOB" stands for __________.

two general methods for quoting prices related to transportation costs are FOB origin pricing and __________.

Uniform delivered pricing refers to

Which of the following statements about geographical adjustments to price is most accurate?

Geographical Pricing Map A -Multiple-zone pricing refers to

price the seller quotes that includes all transportation costs is referred to as __________.

pricing method where all buyers pay the same delivered price for the products,regardless of their distance from the seller,is referred to as __________.

Geographical Pricing Map A -a firm divides its selling territory into geographic areas,it is referred to as

uniform delivered pricing,the price the seller quotes

Which of the following statements about geographical adjustments to price is most accurate?

method of pricing where the price the seller quotes includes all transportations costs and the seller retains title to the goods until delivered to the buyer,thereby assuming responsibility for any damage that may occur,is referred to as

word "Free" in relation to the acronym "FOB" signals the point or location where the seller is

cruise lines pay the customer's airfare to the point of cruise departure.What type of price adjustment are the cruise lines using?

origin pricing refers to

two general methods for quoting prices related to transportation costs are uniformed delivered pricing and __________.