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MKTG 2225 Fall 2014 Ch14 Quiz




Question;Gem Cakes sells designer cupcakes for $4 each. Each cupcake costs $1 for the ingredients and wrapper. Monthly expenses for the shop include the following: rent is $1,000, utilities are $200, an advertisement in the local paper is $200, and wages are $4,000 per month. How much monthly profit would be expected if the business sells 6,000 cupcakes each month? $11,400 $12,600 $24,000 $5,400 $6,000Laura Hillenbrand's book Unbroken, a WWII story of survival and resilience, was a New York Times bestseller in nonfiction for years. During its first year after publication, it often sold 25,000 copies a week in hardcover, at $27 apiece. The publisher's costs were only about $5 a book. What is the total weekly revenue obtained during these weeks? $950,000 $750,000 $800,000 $675,000 $125,000A(n) __________ involves setting different prices for products and services depending on individual buyers and purchase situations in light of demand, cost, and competitive factors. flexible-price policy target-pricing policy price-lining policy cost-plus pricing policy above-, at-, or below-market pricing approachThe Precision Writing Instruments Company makes a high-end pen known as the Cordova. Materials cost per pen is $6. Labor cost per pen is $5. Production overhead is $1,000,000. Advertising and promotion is $1,000,000. What are the total costs for sales of 500,000 units of the Cordova design? $5,500,000 $1,000,000 $3,650,000 $7,500,000 $2,000,000Vending machines are a good example of the application of which type of competition-oriented pricing approach? loss-leader pricing bundle pricing customary pricing at-market pricing penetration pricingIf you buy one pair of UVex Clear UVExtreme safety eyewear in the winter, the cost is $7.40. But if you buy 10 pairs in a single purchase, the price per pair is reduced to $6.85, a total savings of $5.50. This is an example of a promotional allowance. seasonal discount. quantity discount. cash discount. functional discount.North Safety Products manufactures butyl gloves that offer permeation resistance to gas or water vapors for workers that use dangerous chemicals like ketones. The company has fixed costs of $10 million for its butyl glove production and unit variable costs of $5 per pair. If the company charges $15 per pair, how many pairs of gloves must it sell to break even? 200,000 pairs 666,667 pairs 500,000 pairs 2,000,000 pairs 1,000,000 pairsA break-even point refers to the point at which total revenue and average revenue converge. the point at which profit is at a minimum. the point of greatest difference between marginal revenue and marginal cost. the point at which total revenue and total cost are equal. the point at which profit is at a maximum.Newsweek ran a pricing experiment that involved setting different newsstand prices for its magazine in different cities and recording the number of units sold. After adjusting for factors like the population of the different cities, Newsweek could plot these prices and units sold in a graph called a(n) consumer tastes curve. unit volume curve. sales response curve. supply curve. demand curve.Which of the following would be an example of a variable cost for a publication like SHAPE magazine that is targeted to young women seeking a healthier lifestyle? the paper and ink for printing the magazine the salary of the publisher's CEO the rent for a parking garage used by employees the cost of a half-page ad in SHAPE an increase in women in targeted demographicsBijan's in New York City offers a five-piece set of crocodile luggage for $55,000. This is MOST LIKELY an example of __________ pricing. prestige loss-leader skimming predatory penetrationFrom a marketing viewpoint, price is __________ exchanged for the ownership or use of a product or service. the money (coin or currency) the money or other considerations (including other products and services) what is recognized as barter within a particular culture the money or other tangible goods anything of value to the buyer but not necessarily of value to the sellerGuitar Center recently instituted "no haggle" selling prices, much to the dismay of some musicians who enjoyed bargaining and getting a better deal than a novice. But now, no matter which Guitar Center store a customer visits, that person will be quoted the same price for the same guitar. This is an example of a __________ policy. flexible-price customary pricing flat-rate standard-price one-priceWhat is target pricing? alternating and then narrowing the setting prices a few dollars or cents above or under an even or odd number until profit is maximized summing the total unit cost of providing a product or service and adding a specific amount to the cost to arrive at a price estimating the price that ultimate consumers would be willing to pay for a product and then working backward through markups taken by retailers and wholesalers to determine what price they can charge wholesalers for the product setting an annual target of a specific dollar volume of profit setting an annual target of a specific unit volume of salesLow-cost provider Allegiant Air began operations to fly into Long Beach in 2010, and into Bakersfield in 2011. It has since abandoned both efforts because rival carriers responded to its plans with very aggressive price cuts that drove it out of these two markets. The other carriers could be accused of using __________ pricing. competitive deceptive predatory discriminatory skimmingJane Westerlund owns a picture-framing shop, The Caplow Co. Her price must cover her costs for a typical framed picture, which consists of $8 for glass, $2 for matting, $15 for the frame, and $35 for the labor involved. She must also cover monthly expenses of $1,000 for rent and insurance, $200 for heat and electricity, $300 for advertising, and $3,500 for her salary. The Caplow Co. wants a target profit of $55,000 based on a volume of 1,000 picture frames sold so it can expand the number of stores. What price should Jane Westerlund charge for a picture frame? $55 $120 $12 $30 $150Which of the following statements about profit objectives is most accurate? Firms that are interested in strategic planning always establish a maximizing current profit objective. Profit objectives are often measured in terms of return on investment. An organization's chief marketing officer (CMO) usually establishes a target return on expense objective. Managers in the United States have long been praised for their insistence on managing for long-run profits. Market share and unit volume are two types of profit objectivesWhich of the following statements about price elasticity of demand is most accurate? Price elasticity with inelastic demand must always be greater than 1. With inelastic demand, reducing price will result in an increase in total revenue, though not necessarily an increase in profit. The more substitutes a product has, the less likely it is to be price elastic. Seasonal demand for a product like a snowblower does not affect its price elasticity. Items requiring large cash outlays relative to a consumer's disposable income are price elastic.Which of the four pricing approaches would a new-product manager be using if he or she is deciding whether to adopt a penetration or a skimming pricing strategy? profit-oriented pricing approach value-pricing approach competition-oriented pricing approach demand-oriented pricing approach cost-oriented pricing approach


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