The BASF Chemical Company in Germany has developed a new rubberized coating. The product has an application for cell phones and
other hand-held electronic devices that gives them protection from falls and scratches. BASF plans to market the product directly to businesses that manufacture the casings for these types of products. BASF currently uses a system of salespeople headquartered in Germany, while its primary business customers are in China. Refer to Scenario 19.2. If BASF were to employ pricing that includes the price at the factory plus freight charges from a chosen point nearest the buyer, this would be an example of ____ pricing.
Explanation: In simple words, Base point pricing is the method of companies fixing their products prices on the basis of a base cost plus production costs to a particular market.
While some find this a form of collaboration between the selling companies (it reduces the ability of purchasing firms to eliminate competition through position or private transport), it is standard practice in the steel and automotive sectors.
Hence from the above we can conclude that the given case depicts base point pricing.
d. Revenues increase, so total equity is increased.
Explanation:
Consulting Revenue of $700 will increase the total revenue of the business and total equity of the business as the revenue will increase the net profit which will ultimately be added to the equity balance. Increase in revenue will result in increase in equity and Increase in expenses will decrease the equity.
The answer and procedures of the exercise are attached in the following image.
Explanation
Please consider the data provided by the exercise. If you have any question please write me back. Is an opinion what contains the image. Judge it like it is.
