ACCT 005 (Test 2)

A fringe benefit based on the occurrence of some future event

Bonus

Payment for services rendered based on a percentage of revenue generated.

Commission Pay

Which of the following statements is false? A) JIT is a pull system. B) The JIT philosophy is based on continuous improvement. C) JIT requires a company to have strong relationships with its suppliers. D) All of the above are true.

D) All of the above are true.

An additional amount over cost that is added to determine selling price

Markup

The employees take-home pay

Net Pay

An environment where a large number of sellers produce and distribute virtually identical products and services.

Pure Competition

The opportunity cost of not having inventory on hand when it is needed

Stockout cost

An inventory system that uses cards to identify when more inventory is needed

Kanban system

The reduction in price a firm receives when it places a large order

Quantity discount

Which of the following best describes the competitive environment for Sony high definition TVs? A) monopolistic competition B) pure competition C) free competition D) monopoly

A) monopolistic competition

If a product has a cost of $160 and a markup percentage of 60 % what is the selling margin of the product? A) $256 B) $160 C) $96 D) Not enough information to calculate

C) $96

Inventory level when order for more inventory is made

Reorder point

Which of the following best describes the competitive environment for Microsoft Windows? A) monopolistic competition B) pure competition C) free competition D) monopoly

D) monopoly

The pricing strategy where a company initially sets the price of its product low and then raises it later on in the product's life cycle is called: A) price skimming B) target pricing C) life-cycle pricing D) penetration pricing

D) penetration pricing

The amount of inventory to meet daily needs

Daily Demand

Selling products below cost in a foreign market.

Dumping

The full amount an employee earns.

Gross Pay

The time between when an order is placed and when the inventory is received

Lead time

A pricing strategy where the company attempts to set a selling price that will cover the costs of the product over its life

Life-cycle pricing

A company that has exclusive control over a product, service, or geographic market.

Monoply

The practice of setting excessively high prices

Price Gouging

Which of the following is not a key feature of a JIT inventory system? A) Quality and reliable suppliers B) Adequate safety stock C) Well-trained employees D) Customer demand pulls the system

B) Adequate safety stock

The seller of a product is a price taker in which of the following environment? A) Monopolistic competition B) Pure Competition C) Monopoly D) Oligopoly

B) Pure Competition

An environment in which there are many companies whose product/services are similar but not identical.

Monopolistic Competition

Inventory held to prevent a stockout

Safety Stock

Payment for services rendered based on a fixed set of time.

Salary Pay

Selling price less cost

Selling Margin

A pricing strategy where the company first determines the selling price of the product and then decides whether to enter the market.

Target Pricing

Which of the following companies would be a good candidate for a JIT system? A) Grocery Store B) Macys C) Construction company D) Sporting Goods Store

C) Construction company

Which of the following is not withheld from the employee's check? A) Union Dues B) Federal Income Tax C) Social Security D) All of the above are withheld

D) All of the above are withheld

Safety stock is kept in order to: A) Guard against defective products. B) Prevent losses created by a stockout C) Prevent people from being injured by dangerous inventory D) Help identify the reorder point

B) Prevent losses created by a stockout

Which of the following is withheld from an employee's pay and also paid by the employer? A) Income tax B) Union dues C) Vacation Pay D) Social Security

D) Social Security

Payment for services rendered based on the number of items completed

Piece-rate Pay

The practice of selling products below cost in an attempt to drive out competition, control the market, and then raise prices

Predatory Pricing

A pricing strategy in which the company sets its initial selling price high in an attempt to appeal to those individuals who want to be the first to have the product and who are not concerned about price

Skimming Pricing

A compensation method whereby employees are paid according to the amount they sell in a given time-period is known as: A) commission-based compensation B) piece-rate compensation C) deferred compensation D) bonus compensation

A) commission-based compensation

Once it saw Netscape Navigator as a serious competitor, Microsoft began to give away copies of Internet Explorer. This is an example of which pricing strategy? A) penetration pricing B) pioneer price C) life-cycle pricing D) price skimming

A) penetration pricing

A pricing strategy where a company sets its initial selling price low in an attempt to gain a share of the market from competitors

Penetrating Pricing

When a group of companies agree to limit supply and charge identical prices

Price Fixing

Capital Industries' president receives a bonus equal to 6% of net income. This bonus is included in the determination of net income. If the company's income before bonus was $3,800,000, the amount of the bonus is: A) $215,094 B) $228,000 C) $242,553 D) cannot be determined from the information given

A) $215,094

Lockwood International's president receives a bonus equal to 7% of net income. This bonus is included in the determination of net income. If the company's income before the bonus was $4,500,000, the amount of the bonus is: A) $294,393 B) $315,000 C) $338,710 D) cannot be determined from the information given

A) $294,393

A reorder point in a Kanban system is identified by a: A) A card B) A color coded inventory item C) A predetermined date D) A pokemon

A) A card

Which of the following describes the practice of selling a product in other countries for a price less than the company's cost? A) Dumping B) Predatory Pricing C) Price Skimming D) Penetrating Pricing

A) Dumping

Which of the following is not withheld from the employee's check? A) Federal Unemployment Tax B) Federal Income Tax C) Social Security D) Union dues

A) Federal Unemployment Tax

Life-cycle pricing: A) attempts to establish a price that can be maintained throughout the life of the product B) sets the price high to begin with and then lowers it later on in the life of the product C) sets the price low to begin with and then raises it later on in the life of the product D) is the same as target pricing

A) attempts to establish a price that can be maintained throughout the life of the product

A compensation method under which a company pays employees according to the number of items they produce during a given time-period is known as: A) piece-rate pay B) deferred pay C) contract pay D) bonus pay

A) piece-rate pay

If a product has a cost of the $250 and a selling price of $450, what is the products markup percentage? A) 200% B) 80% C) 44.4% D) Not enough information to calculate

B) 80%

West Coast Creamery's economic order quantity is 300 units. Demand for the year is 41,975 units. There are seven days between the time an order is placed and the day it is received. West Coast operates 365 days per year. The reorder point is: A) 268 units B) 805 units C) 2,683 units D) 2,905 units

B) 805 units

Which of the following is not a factor in the EOQ inventory model? A) Annual demand for the inventory in units B) Cost of the inventory item C) Cost to place one additional order D) Cost to carry one additional unit in inventory

B) Cost of the inventory item

Which of the following statements is false? A) JIT is a pull system. B) JIT is a short-run model. C) The JIT philosophy is based on continuous improvement. D) JIT requires a company to have strong relationships with its suppliers.

B) JIT is a short-run model.

Which of the following companies would not be a good candidate for a JIT system? A) Ford Motor Company B) The GAP C) A company that manufactures yachts D) Dell computers

B) The GAP

In general, which of the following is not true about the pricing of products? A) When supply increases prices decrease B) When demand decreases prices increase C) When supply decreases prices increase D) When demand increases prices increase

B) When demand decreases prices increase

The four primary influences on selling price are: A) product, variable costs, fixed costs, and mixed costs B) customers, competition, legal and social issues, and costs C) competition, variable costs, fixed costs, and mixed costs D) legal constraints, government regulations, costs and customers

B) customers, competition, legal and social issues, and costs

Which of the following is not a factor when using "Target Pricing"? A) Determining the price based on consumer surveys B) Determine the markup necessary to get a satisfactory return to stockholders C) Determining the price of competitors so our price will be lower D) Determine the target cost and see if product can be produced for that amount.

C) Determining the price of competitors so our price will be lower

Which of the following is not part of the revenue process? A) Deliver goods and services B) Receive and accept orders C) Make payments for inventory D) Determine marketing and distribution channels to generate orders.

C) Make payments for inventory

Lead time in an inventory system is: A) The time it takes to sell inventory B) The time it takes to move raw materials inventory from the warehouse to the manufacturing facility C) The time between placing an order for inventory and the when the inventory is received D) The time it takes to manufacture a product plus the time it takes to ship the product to the customer.

C) The time between placing an order for inventory and the when the inventory is received

Panascope manufactures high-definition TVs (HDTVs). It costs Panascope $1,500 to produce one HDTV. Panascope, planning to "make hay while the sun shines" has priced its HDTVs at $12,000. This is an example of which pricing strategy? A) penetration pricing B) life-cycle pricing C) price skimming D) pioneer price

C) price skimming

Which of the following is not a factor in the EOQ inventory model? A) Annual demand for the inventory in units B) Cost to place one additional order C) Cost to carry one additional unit in inventory D) All of the following are factors in the EOQ model.

D) All of the following are factors in the EOQ model.

Which of the following describes the practice of setting the price of a product at less than cost to take over a market and then to raise the price? A) Dumping B) Price Skimming C) Penetrating Pricing D) Predatory Pricing

D) Predatory Pricing

The type of environment where a large number of sellers produce and distribute virtually identical products and services is referred to as: A) Monopolistic competition B) Oligopolistic competition C) Price competition D) Pure competition

D) Pure competition

How are defective products identified in a JIT inventory system? A) Defective inventory is stacked in a particular location. B) Defective inventory is color coded C) Defective inventory marked down for consumers D) The production line is stopped and only started when the problem causing the defective product is identified.

D) The production line is stopped and only started when the problem causing the defective product is identified.

In general, which of the following is true about the pricing of products? A) When supply increases prices increase B) When demand decreases prices increase C) When supply decreases prices increase D) When demand increases prices increase

D) When demand increases prices increase

Which of the following is not one of the perspectives that compose the balanced scorecard approach? A) financial B) internal processes C) learning and growth D) flexibility and efficiency

D) flexibility and efficiency

Payment for services rendered based on hours worked.

Hourly Pay

An environment where a few firms control the types of products and services and their distribution.

Oligopoly