| 1. | The pricing method used by services companies, such as home repair services, architectural firms and automobile repair services is known as |
| a. | product life cycle method |
| b. | life cycle budgeting method |
| c. | life cycle costing method |
| d. | time and material method |
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Answer: (d).time and material method
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| 2. | The practice by seller, about offering same product at different prices, to the different customers is known as |
| a. | price incurrence |
| b. | price discrimination |
| c. | price targeting |
| d. | price engineering |
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Answer: (b).price discrimination
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| 3. | The total cost incur by customer to use, acquire, maintain and dispose service or product is classified as |
| a. | budgeted life cycle |
| b. | targeted life cycle |
| c. | customer life cycle |
| d. | operating life cycle |
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Answer: (c).customer life cycle
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| 4. | If cost is eliminated, then reducing the perceived usefulness that customers can obtain by using the market offering will come under |
| a. | designed-in costs |
| b. | locked-in costs |
| c. | value added cost |
| d. | non-value added cost |
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Answer: (c).value added cost
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| 5. | If total production is 25000 units and target annual operating income is $300000, then target operating income per unit would be |
| a. | $15 |
| b. | $12 |
| c. | $16 |
| d. | $18 |
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Answer: (b).$12
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