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Which pricing strategy sets it's initial selling price low in an attempt to gain a share of the market from it's compeitors?
Penetration Pricing
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Which pricing practice sells products below cost in an attempt to drive out competition?
Predatory Pricing
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Which pricing strategy sets the initial selling price high in attempt to appeal to those individuals who want to be the first to have the product and are not concerned about price?
Skimming pricing
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Which pricing practice sets excessively high prices?
Price gouging
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Which pricing strategy attempts to set a selling price for the life of the product based on its total life-cycle costs?
Life-cycle Pricing
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Which pricing strategy firsts determines the selling price of the product and then decides whether to enter the market?
Target pricing
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What type of environment has a large number of sellers producing and distributing virtually identical products and services?
Pure competition
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What type of environment has many companies whose products or services are similar but not identical?
Monopolistic competition
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What type of environment consists of a company that has exclusive control over a product, service or geographic market?
Monopoly
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What type of environment consists of a few firms controlling the types of products and their distribution?
Oligopoly
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Starline Company expects its gross payroll for the period to be $32,000. Assuming that its FICA rate is 7.65%, its FUTA rate is .8%, and its SUTA rate is 3.5%, what is the expected payroll tax for the period?
(Add up all the taxes for Tax on company)
- 32k x 0.0765 = $2448
- 32k x 0.008 = $256
- 32k x 0.035 = $1120
= $3,824
(We know its taxes of employer bc there is no state/ fed taxes taken out from employees)
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Meyer Manufacturing Company expects its gross payroll to be $54,000. It expects to withhold 7.65% of the gross payroll for FICA taxes. 15% for federal income taxes, and 5% for state income taxes. What is the expected net pay for the period?
(Add up all taxes, then subtract that total from gross payroll)
- $54k x 0.0765 = $4131
- $54k x 0.15 = $8100
- $54k x 0.035 = $1120
- = $14,931
- $54,000 - $14,931
- = $39,069
(We know its taxes on employees because they have to pay state and federal taxes on their paycheck)
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MAKE OR BUY PROBlEM
Whitney, Inc. manufactures a unique hand lotion. Production costs for the 15,000 containers needed annually are as follow:
Direct Materials: $35,000
Direct Labor: $15,000
Unit-related overhead: $5,000
Product-sustain. overhead: $6,000
Allocated facility-sustain. overhead: $14,000
A supplier had offered to provide all 15,000 containers at a price of $4.50 per container. If Whitney Inc. accepts the offer, it will rent the released space for an annual rent fee of $12,000. Should Whitney Inc. make or buy the containers?
Make:
- DM: $35k
- DL: $15k
- Unit OH: $5k
- Prod. OH: $6k
- Opp. Cost: $12k
- = $73k to make
- =-=-=-=-=-
Buy:
- 15,000 containers
- x $4.50/ container
- = $67,500 to buy
Whitney Inc. should buy because it is cheaper by $5,500
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