Which of the following statements is true with respect to value engineering?I). Value engineering is a means of reaching targeted cost levels.II). Value engineering is the Japanese concept that emphasizes continuous improvement in all phases of company activities through numerous minor changes.III). Value engineering requires distinguishing between cost incurrence and locked-in costs, with an emphasis on controlling costs at the design stage.
Answer(s): B
Value engineering is a means of reaching targeted cost levels. Value engineering requires distinguishing between cost incurrence and locked-i n costs, with emphasis on controlling costs at the design stage. It is not Japanese.
Company F applies a target pricing and costing approach. The following information about costs and revenues of Company F's product are available for the year just ended:Company F plans to increase unit sales to 80, 000 by reducing the product's unit price to US $320. If Company F desires a unit target operating income of 12%, by what amount must it reduce the full cost per unit?
Answer(s): C
Unit target operating income is US $38.40 12% > $320 unit target price). Hence, the unit target full cost is US $281.60 $320 - $38.40). The current full cost per unit is US $352.00 [($13, 200, 000 CGS + $7, 920, 000 other value chain operating costs) - 60, 000 units sold], so the necessary reduction in the full cost per unit is US $70.40 $352.00 - $281.60).
When film is sold for use with a camera, this is an example of which of the following product mix pricing strategies?
Captive products are those that must be used along with the main product. Sellers often make their money on the captive products, rather than on the main product that is sold at a Iov.+ price. The captive products will therefore be priced well above the storage and delivery costs.
A competitive marketing strategy in which a firm specializes in serving customers overlooked or ignored by major competitors is called a
Answer(s): D
Specializing in serving customers overlooked or ignored by major competitors is a market niche strategy. This strategy specializes along market, customer, product, or marketing mix lines.
Which of the following is the method of adding a standard markup to the cast of the product?
Cast-based pricing is a pricing method in which a standard markup or target profit is added to the cast of the product in determining the product's sales price.
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