strategy that attaches value-added features and services to differentiate a market offering and support higher prices, rather than cutting prices to match competitors. Cost-Based Pricing: A pricing method in which a fixed sum or a percentage of the total cost is added (as income or profit) to the cost of the product to arrive at its selling price. Fixed Costs (Overhead): A periodic cost that remains more or less unchanged irrespective of the output level or sales revenue, such as depreciation, insurance
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to be some flaws that should be considered. First, the initial calculations by the committee of the total unit cost of $18.90 (per book) is incorrect. Second, determination of the total unit cost of $23.90 (per book) supposing the request of $5,000 is granted is incorrect. Third, the consideration of eliminating the department altogether is based on the assumption the University can save a total of $23,900, which is also incorrect. The mistakes that have been made are mostly due to the mistreatment
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For my project, I ran Coffee-Roma, a coffee shop located in the business district of a large city. My simulation ran for 60 days. Over this timeframe, I hired 7 employees and earned gross revenues of $89,984.20. From those revenues, my net profit totaled $14,046.83. Below are the details of how I attempted to best run my business. What adjustments did you make to try and improve performance? The primary adjustments that I made to improve performance included proper staffing procedures
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administrative expenses are product costs under generally accepted accounting principles. True False 9. A variable cost is a cost whose cost per unit varies as the activity level rises and falls. True False 10. When the level of activity increases, total variable cost will increase. True False 11. A decrease in production will ordinarily result in an increase in fixed production costs per unit. True False 12. Automation results in a shift away from variable costs toward more fixed costs. True
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free Bank loan A fixed amount loan from a bank which is generally used to finance long-term assets Bank overdraft Borrowings from a bank on a current account which are payable on demand Breakeven point The point at which the total sales of a business equal total costs -i.e. the business is making neither a profit nor a loss Budget A detailed plan of income and expenses expected over a certain period of time Business plan A detailed description of a new or existing business, including the
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FOUNDATION EXAMINATION Exam Bank 007 – December 2013 Business Studies 1 MARK SCHEME BELLERBYS COLLEGE FOUNDATION EXAMINATION SECTION A – SHORT ANSWER QUESTIONS Answer ALL questions in this section. 1. Name two things that should be present in a good business plan. Executive summary, location, marketing, finance, financial forecasts, personnel Any other reasonable answer should be accepted. 1 mark per relevant point given. (2 marks) 2. Using an example for each point
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000*42)/42) = 238000 = 894.43 Ordering Costs (Co) = $42 per order Per Unit Cost of inventory =500 Holding cost rate = 3% Holding cost(Ch) = $500(.03) = $15.00 Q = 894 To find the order size for Company A in the scenario above that would minimize total annual cost I chose to use the economic order quantity formula. The numbers for demand, ordering cost, holding cost and unit cost were given in the scenario. With this I determined the holding cost-per unit cost of inventory X holding cost rate=holding
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the break-even point. This is the amount that revenues can fall while still staying above the break-even point to ensure that profitability is maintained. The information used to determine and analyze the breakeven point includes fixed, variable and total costs and the associated sales revenues. A breakeven chart is a strategic tool used to plot the financial revenue of a business unit against time or sales to determine the point when sales output is equal to revenue generated. This is recognized
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setting of a merger of two firms, Western Pharmaceutical and Atlantic Medical. While their product lines don’t overlap, there is definite overlap in their distribution systems. Both the demand and cost data is provided in spreadsheets to facilitate a total cost analysis. This case provides students with a comprehensive and realistic distribution center location problem that can be solved using a spreadsheet analysis. While the analysis can be completed using a supply chain design planning tool such
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CHAPTER 12 PRICING DECISIONS AND COST MANAGEMENT 12-1 The three major influences on pricing decisions are 1. Customers 2. Competitors 3. Costs 12-2 Not necessarily. For a one-time-only special order, the relevant costs are only those costs that will change as a result of accepting the order. In this case, full product costs will rarely be relevant. It is more likely that full product costs will be relevant costs for long-run pricing decisions. 12-3 Two examples of pricing decisions with
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