The correct question should be:
Companies facing the challenge of setting prices for the first time can choose between two board strategies; marketing-penetration pricing and _______ pricing.
Answer: Market Skimming pricing.
Explanation:
A company with a product new to the market can either choose to use the market penetration pricing or the market skimming pricing.
The market penetration pricing works best in a market with a lot of competition. The penetration pricing is a kind of pricing a company uses where the price of it's Products are set to be very low to attract price-sensitive consumers and still make profit.
The market skimming pricing on the other hand is a price setting method where a high entry price is set for a new product and then subsequently reduced with increase in market competition.
Answer:
Total cost= $1,375
Explanation:
Giving the following information:
The budgeted factory overhead last year was $200,000, and there were 40,000 machine hours budgeted.
Job 84:
Direct materials= $900
direct labor hours= 25
Direct labor cost= $350.
First, we need to calculate the manufacturing overhead rate based on direct labor hours:
Estimated manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Estimated manufacturing overhead rate= 200,000/40,000= $5 per direct labor hour
Now, we can calculate the total cost:
Total cost= direct material + direct labor + allocated overhead
Total cost= 900 + 350 + 5*25= $1,375
Answer:
The production exhibit both scope economics and scale economics. They are not mutually exclusive.
Explanation:
Looking at the scenario critically, we will clearly see the tendency of a scope economics. Scope economics basically hinges on getting a competitive advantage, essentially because of producing in large quantities and numbers. Riverside Ranger logo T-shirts exhibits this as it produce its products in large numbers, producing 1000 pieces of a particular design in 1 hour.
In same breath, we also have the scale economics exhibited by the organization. Taking a deeper look at the cost representation, we will see that the average cost tend to reduce as the production increases. Thus, an economic of scale is achieved here by leveraging on the mass and swift production style of Riverside Rangers logo T-shirts.
