SEM II 3.03 Study Guide Question Preview (ID: 37880)


Study Guide For Review SEM II 3.03 Study Guide. TEACHERS: click here for quick copy question ID numbers.

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) 50 units
b) 80 units
c) 100 units
d) 500 units

If a goal is to avoid storing or discarding merchandise, what pricing strategy should be selected?
a) Competitive
b) Close out
c) Cost plus markup
d) Versioning

Why do sportswear stores calculate breakeven in units?
a) To identify which products they should purchase for resale
b) To find out how much profit they will earn after they breakeven
c) To identify which costs are variable and which are fixed
d) To determine how many products they must sell to breakeven

A sporting event setting ticket prices based on the ability of potential customers to pay is an example of what pricing strategy?
a) Promotion
b) Objective
c) Restriction
d) Motive

An increase in ticket prices is most accepted by fans if a sport has which demand for tickets?
a) Inelastic
b) Low
c) Elastic
d) Unitary

What do sales beyond the breakeven point provide to a business?
a) Initial markup
b) Variable-cost margin
c) Dividends
d) Profit

Why would an event marketer promote an upcoming celebrity golf tournament at an exclusive course as an once-in-a-lifetime event?
a) To have expensive media coverage
b) To obtain more industry support
c) To increase advertising costs
d) To generate higher ticket prices

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) $11.71
c) $11.26
d) $10.97

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) 6,000
b) 4,000
c) 3,000
d) 600

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) Cost
c) Sales
d) Contingency

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) $850,000
b) $890,000
c) $903,000
d) $985,000

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) 96,000
b) 48,000
c) 32,000
d) 4,800

When setting ticket prices for professional baseball games, the organization considers the performance of the team. Which factor is considered?
a) Situational
b) Ethical
c) Operational
d) Developmental

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) Previous winning potential
b) Number of games played
c) What the market will bear
d) Location of the target market

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) Competition
c) Profitability
d) Volume

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) $64.25
b) $56.25
c) $48.00
d) $32.25

Which is the least important factor when selecting a pricing strategy?
a) Promotional strategy
b) Competitor price
c) Cost of merchandise
d) Location of store

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