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SEM II 3.03 Study Guide
Test Description: Study Guide for review SEM II 3.03 Study guide
Instructions: Answer all questions to get your test result.
1) Determine the breakeven point in units using the total fixed cost, $4,000; variable cost per unit, $20; and selling price per unit, $100.
A
80 units
B
50 units
C
500 units
D
100 units
2) If a goal is to avoid storing or discarding merchandise, what pricing strategy should be selected?
A
Versioning
B
Close out
C
Competitive
D
Cost plus markup
3) Why do sportswear stores calculate breakeven in units?
A
To determine how many products they must sell to breakeven
B
To identify which costs are variable and which are fixed
C
To find out how much profit they will earn after they breakeven
D
To identify which products they should purchase for resale
4) A sporting event setting ticket prices based on the ability of potential customers to pay is an example of what pricing strategy?
A
Motive
B
Promotion
C
Objective
D
Restriction
5) An increase in ticket prices is most accepted by fans if a sport has which demand for tickets?
A
Low
B
Elastic
C
Unitary
D
Inelastic
6) What do sales beyond the breakeven point provide to a business?
A
Dividends
B
Initial markup
C
Profit
D
Variable-cost margin
7) Why would an event marketer promote an upcoming celebrity golf tournament at an exclusive course as an once-in-a-lifetime event?
A
To generate higher ticket prices
B
To have expensive media coverage
C
To obtain more industry support
D
To increase advertising costs
8) A business purchased a line of items for resale that cost $9.32 each. Expenses total $1.65 per item. What is the breakeven price per item?
A
$11.92
B
$11.26
C
$11.71
D
$10.97
9) A business decided to produce 6,000 football cushions and sell them for $6 each. They cost the company $4 each to produce. How many cushions must the company sell to break even?
A
4,000
B
3,000
C
600
D
6,000
10) When a hockey team set its ticket prices so it can achieve its goal of increasing its fan base by five percent, the hockey team established a price objective in conjunction with which type of activity?
A
Licensing
B
Sales
C
Cost
D
Contingency
11) If the selling price of a product is $430 per unit, and the number of units required to reach the breakeven point is 2,100, what is the total dollar sales the business needs to break even?
A
$903,000
B
$850,000
C
$985,000
D
$890,000
12) The variable cost for a product is $3, and the total fixed costs are $288,000. The company sells the products for $6 each. How many products will the company have to sell to break even?
A
32,000
B
96,000
C
4,800
D
48,000
13) When setting ticket prices for professional baseball games, the organization considers the performance of the team. Which factor is considered?
A
Developmental
B
Operational
C
Situational
D
Ethical
14) A professional football team that increased ticket prices for next season because the team is on a winning streak selected a pricing strategy based on which situation?
A
Location of the target market
B
What the market will bear
C
Previous winning potential
D
Number of games played
15) A college athletic department set the football ticket prices so that the organization can earn income of $12 per ticket after covering expenses. This is an example of a price objective based on which component?
A
Demand
B
Profitability
C
Competition
D
Volume
16) A soccer camp provided five leaders at $8 per hour for eight hours a day for five days. If benefits are 20% of the wages and supplies total $650, calculate the cost per person if 40 players attend.
A
$32.25
B
$48.00
C
$64.25
D
$56.25
17) Which is the least important factor when selecting a pricing strategy?
A
Location of store
B
Competitor price
C
Promotional strategy
D
Cost of merchandise
*select an answer for all questions
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