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Exam 12: Technology and Operations Management

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Question 61

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The more the cost base is composed of fixed or indirect costs,the more easy it is for managers to use cost reduction strategies to protect the organization's profitability in response to decreases in demand for products and services.

A) True
B) False

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Question 62

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At the break-even point target profit is achieved.

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B) False

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Question 63

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A type of indirect costs,called _______ are costs which the organization commits itself to within an operating year,and which often are spent in advance or at the front end of a manufacturing/sales cycle.

to cut costs wherever possible.

The level of sales revenue or volume which is required in order for the organization to cover all of its costs is called the break-even point.

The formula for the Break-even Point plus profit is total fixed costs.

What are fixed costs and provide an example.

Variable costs are those costs which are directly tied to the manufacturing of a product,or the delivery of a service,depending on the type of business being assessed.

Odd pricing strategy represents a pricing strategy that establishes a low price in hopes of attracting a great number of customers and attempts to discourage competitors.

Producers often use tariffs as a primary basis for setting prices on the goods and services they offer the public.

The more the cost base is composed of fixed or indirect costs,the more effortless it is for managers to use cost reduction strategies to protect the organization's profitability in response to decreases in demand for products and services.

A skimming pricing strategy drives competitors out of business in order to achieve a monopoly position in the market.

Phil asks you to calculate the break-even point for his firm.You respond that you will need the following information:

Phil asks you to calculate the break-even point for his firm.You respond that you will need total fixed costs,selling price,and variable costs per unit.

Barker Brothers Pens utilizes a strategy of low prices to attract customers and discourage competition.This represents a discounting strategy.

The more the cost base is composed of variable or direct costs,the more ______ managers have over the actual management of this cost base on a day-to-day basis.

Ongoing operating levels below BEP will eventually result in the organization becoming bankrupt.

A skimming pricing strategy:

Costs incurred regardless of the number of units of a product that are produced or sold are called mixed costs.

The more the cost base is composed of variable or direct costs,the more ______ managers have over the actual management of this cost base on a day-to-day basis.