Pricing Strategy Steps in Setting Price: Following are the steps in setting price for a product: 1. Selecting the pricing objectives; 2. Determining the consumers’ demand; 3. estimating costs; 4. Analysing the competitors’ costs‚ prices and offers; 5. Selecting a pricing method; and 6. Selecting the final price. 1. Selecting the pricing objectives: Before selecting a suitable price for a product‚ the marketer is needed to review the company’s objectives. The more clearer the company’s
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A. Sales discount E. FOB shipping point H. Purchase discount B. Credit period F. Gross profit I. Cash discount C. Discount period G. Merchandise inventory J. Trade discount D. FOB destination 1. Goods a company owns and expects to sell to its customers. G 2. Time period that can pass before a customer’s payment is due. B 3. Seller’s description of a cash discount granted to buyers in return for early payment. A 4. Reduction below list or catalog price that is negotiated in setting the
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CHAPTER 5 Merchandising Operations and the Multiple-Step Income Statement ANSWERS TO QUESTIONS 1. (a) Disagree. The steps in the accounting cycle are the same for both a merchandising company and a service company. (b) The measurement of income is conceptually the same. In both types of companies‚ net income (or loss) results from the matching of expenses with revenues. 2. The components of revenues and expenses differ as follows: | | Merchandising | | Service | RevenuesExpenses
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500 | | | Purchase Return & Allowance | | 7‚500 | | Return 5 defected lounge chairs. | | | | | | | 10 | Freight In | 860 | | | Cash | | 860 | | Paid trucking firm on April 3 | | | | | | | 13 | Accounts Payable | 67‚500 | | | Purchased Discount | | 1‚350 | | Cash | | 66‚150 | | Paid purchased on April 3 | | | | | | | 17 | Cash | 18816 | | | Sales Discount | 384 | | | Accounts Receivable
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lecture‚ the students should be able to: 1. Explain the nature of inflation 2. Distinguish between money cash flow and real cash flow 3. Distinguish between money and real discount rates 4. Compute impact of inflation on discounted cash flow. 5. Explain investment incentives - capital allowance‚ annual allowance initial allowance 6. Compute impact of tax on capital investment Introduction Inflation refers to persistent increase in price of goods and services. It is also referred to as average
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Merchandising operation and merchandise inventory Businesses that sell a product to customers Inventory Merchandise held for sale Asset account 3 Describe and illustrate merchandising operations and the two types of inventory systems 4 Balance Sheet Inventory Asset Income Statement Sales revenue Cost of goods sold Expense 5 Cash Purchase inventory Collect cash from customers Accounts receivable Sell inventory Inventory
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1. The first step of successful price setting is selecting the pricing objective. There are five major objectives in pricing strategies: survival‚ maximum current profit‚ maximum market share‚ maximum market skimming and product-quality leadership. Out of these possible objectives‚ Sonic should focus on the survival objective. Sonic should pursue survival objective because its current market is highly preoccupied and filled with intense competition where consumer demands shift every day. Sonic is
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indicating the specific goods received and the quantity of goods. A) True B) False 8. Trade discounts are recorded in the accounting records of both the buyer and the seller. A) True B)
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There are four key sales promotion techniques that marketing firm use to build inters in a product or increases the sales of a product over a specific period of time. These techniques are discounts and deals‚ increasing industry visibility‚ price– based consumer sales promotion and attention– getting consumer sales promotion. This paper will summarize these four key techniques and give real life examples of each technique that marketing firm direct at both trade and consumers. Before we in our
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Debit bad debt expense‚ $4‚000; credit allowance for uncollectible accounts $4‚000 C. Debit allowance for uncollectible accounts‚$9‚000; credit bad debt expense‚ $6‚500 D. Debit bad debt expense‚ $9‚000;crdit allowance for uncollectible accounts‚ $9‚000 28. suppose that balance of a company’s allowance for uncollectible accounts was $6‚200(cr) at the end of 2012‚ prior to ant adjustments. The compant estimated that
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