FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 12: Technology and Operations Management

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 41

True/False

Review LaterAdd Note

Review Later

Ongoing operating levels below BEP will eventually result in the organization becoming a disaster.

A) True
B) False

Correct Answer

verified

Show Answer

Question 42

True/False

Review LaterAdd Note

Review Later

The make-up of their cost base is an area of focus for managers to develop a good understanding of an organization's cost base.

A) True
B) False

Correct Answer

verified

Show Answer

Question 43

Multiple Choice

Review LaterAdd Note

Gourmet Pets feels its target market is more concerned with perceived quality than actual product cost.They also feel that the newness of this concept offers an opportunity to make high profits since they are the first firm to enter this market,so they face no direct competition.Their decision to charge a high price is consistent with the ________ strategy.

Gourmet Pets feels its target market is more concerned with perceived quality than actual product cost.They also feel that the newness of this concept offers an opportunity to make high profits since they are the first firm to enter this market,so they face no direct competition.Their decision to charge a high price is consistent with the price leadership strategy.

The more the cost base is composed of fixed or indirect costs,the more straightforward it is for managers to use cost reduction strategies to protect the organization's profitability in response to decreases in demand for products and services.

What is mark-up pricing?

is fundamental to determining the feasibility of various profit objective levels.

To build an understanding of the cost base is accomplished by working through the various zones within an organization's value chain and determining the cost composition of each.

Semi-fixed costs are those costs which are directly tied to the manufacturing of a product,or the delivery of a service,depending on the type of business being assessed.

What should managers consider with operating at or below the BEP?

The more the cost base is composed of fixed or indirect costs,the more difficult it is for managers to use cost reduction strategies to protect the organization's profitability in response to decreases in demand for products and services.

To build an understanding of the cost base is accomplished by working through the various zones within an organization's functions and determining the cost composition of each.

Cost-based pricing is the process used to determine the profitability of a product at various levels of sales.

Virtual Electronics utilizes a strategy to charge a very high introductory price for their automobile video theater.After identifying that their rival firms did not carry this new product,they chose this strategy to achieve maximum profits.Virtual Electronics has chosen a skimming strategy.

What is the best way to cut costs?

At the break-even point variable costs are equal to total fixed costs.

The formula for the Break-even Point plus profit is forecasted cash requirements.

Barker Brothers Pens utilizes a strategy of low prices to attract customers and discourage competition.This represents a _______ strategy.

To build an understanding of the cost base is accomplished by working through the various zones within an organization's divisions and determining the cost composition of each.

The percentage of the cost base which lies within their control in the near term is an area of focus for managers to develop a good understanding of an organization's cost base.