72-78

Front 1

72. When a pharmaceutical company uses the phrase "ask your doctor" in its ads, the company is using
a _____ strategy to appeal directly to the public instead of physicians alone.
A) public relations
B) pulling
C) pushing
D) sales promotion

Back 1

B) Pulling

Front 2

73. Wal-Mart's pricing objective is based primarily on _____ while a jewelry store's objective is based primarily on_____
A) profitability; prestige
B) profitability; profitability
C) volume; prestige
D) volume; profitability

Back 2

C) Volume; prestige

Front 3

74. In breakeven analysis, total cost is composed of
A) price divided by number of units sold
B) variable cost minus fixed costs
C) total variable cost and total fixed costs
D) total sales minus expenses

Back 3

C) total variable cost and total fixed costs

Front 4

75. In breakeven analysis, the costs that change with the level of production are considered
A) variable
B)recoverable
C)labor
D) fixed

Back 4

C) Labor

Front 5

76. Assume a product costs $5 each. The variable cost per unit is currently $4, and fixed costs are $25,000. If the company can alter its production method such that variable costs fall to $3.50 and fixed costs rise to $30,000, what will happen to the breakeven point?
A) It will fall.
B) It will rise.
C) It will remain the same.
D) It will rise and fall later.

Back 5

A) It will fall

Front 6

77. Business costs that remain stable regardless of the production level achieved are called
A) inflexible
B) fixed
C) variable
D) production

Back 6

B) Fixed

Front 7

78. If you did a breakeven analysis for your firm, it would be possible for you to show management the point at which_____
A) the firm's fixed costs would climb sharply
B) the firm would not make a profit if it sold additional units
C) Profits would be maximized
D) The level of sales will cover all of the company's costs.

Back 7

D) The level of sales will cover all of the company's costs