Chapter 5: Strategic Planning Regarding Operating ProcessesChapter 5: Strategic Planning Regarding Operating ProcessesChapter 5Chapter 5: Strategic Planning Regarding Operating ProcessesChapter 5Strategic Planning Regarding Operating ProcessesMATCHING1. Match the following terms with the descriptions below.A. Monopolistic competitionB. MonopolyC. OligopolyD. Pure Competition_____ 1. A company that has exclusive control over a product, service, or geographic market. _____ 2. An environment where a large number of sellers produce and distribute virtually identical products and services. _____ 3. An environment in which there are many companies whose product/services aresimilar but not identical. _____ 4. An environment where a few firms control the types of products and services and their distribution. Answer: 1.B; 2. D; 3.A; 4.C 2. Match the following terms with the descriptions below.A. Commission PayB. BonusC. Hourly PayD. Net PayE. Piece-rate PayF. Gross PayG. Salary Pay____ 1. The employees take-home pay.____ 2. Payment for services rendered based on the number of items completed. ____ 3. A fringe benefit based on the occurrence of some future event. ____ 4. The full amount an employee earns. ____ 5. Payment for services rendered based on hours worked.____ 6. Payment for services rendered based on a fixed set of time. ____ 7. Payment for services rendered based on a percentage of revenue generated. Answer: 1.D; 2.E; 3.B; 4.F; 5.C; 6.G; 7.A Ainsworth/Deines, Introduction to Accounting: An Integrated Approach, 4/e86Chapter 5: Strategic Planning Regarding Operating Processes3. Match the following terms with the descriptions below. A. Markup B. DumpingC. Life-cycle pricingD. Penetrating pricingE. Predatory pricingF. Price fixingG. Price gougingH. Selling MarginI. Target PricingJ. Skimming Pricing____ 1. A pricing strategy where the company first determines the selling price of the product and then decides whether to enter the market. ____ 2. The practice of setting excessively high prices. ____ 3. Selling products below cost in a foreign market ____ 4. A pricing strategy in which the company sets its initial selling price high in an attempt to appeal to those individuals who want to be the first to have the product and who are not concerned about price. ____ 5. When a group of companies agree to limit supply and charge identical prices.____ 6. Selling price less cost. ____ 7. A pricing strategy where a company sets its initial selling price low in an attemptto gain a share of the market from competitors.____ 8. The practice of selling products below cost in an attempt to drive out competition, control the market, and then raise prices. ____ 9. An additional amount over cost that is added to determine selling price.____ 10. A pricing strategy where the company attempts to set a selling price that will cover the costs of the product over its life. Answer: 1.I; 2.G; 3.B; 4.J; 5.F; 6.H; 7.D; 8.E; 9.A; 10.C Ainsworth/Deines, Introduction to Accounting: An Integrated Approach, 4/e87Chapter 5: Strategic Planning Regarding Operating Processes4. Match the following terms with the descriptions below.A. Daily DemandB. Kanban systemC. Lead timeD. Quantity discountE. Reorder pointF. Stockout costG. Safety stock____ 1. Inventory level when order for more inventory is made. ____ 2. The amount of inventory to meet daily needs. ____ 3. Inventory held to prevent a stockout.____ 4. An inventory system that uses cards to identify when more inventory is needed.____ 5. The time between when an order is placed and when the inventory is received.____ 6. The reduction in price a firm receives when it places a large order. ____ 7. The opportunity cost of not having inventory on hand when it is needed. Answer: 1.E; 2.A; 3.G; 4.B; 5.C; 6.D; 7.F MULTIPLE CHOICE5. Which of the following is not one of the perspectives that compose the balanced scorecard approach? A) financial B) internal processes C) learning and growth D) flexibility and efficiency Answer: D Difficulty: Medium 6. Which of the following is not part of the revenue process? A) Deliver goods and services B) Receive and accept orders C) Make payments for inventory D) Determine marketing and distribution channels to generate orders. Answer: C Difficulty: Medium 7. The four primary influences on selling price are: A) product, variable costs, fixed costs, and mixed costs B) customers, competition, legal and social issues, and costs C) competition, variable costs, fixed costs, and mixed costs D) legal constraints, government regulations, costs and customers Ainsworth/Deines, Introduction to Accounting: An Integrated Approach, 4/e88Chapter 5: Strategic Planning Regarding Operating ProcessesAnswer: B Difficulty: Easy 8. In general, which of the following is not true about the pricing of products? A) When supply increases prices decrease B) When demand decreases prices increase C) When supply decreases prices increase D) When demand increases prices increase Answer: B Difficulty: Easy 9. In general, which of the following is true about the pricing of products? A) When supply increases prices increase B) When demand decreases prices increase C) When supply decreases prices increase D) When demand increases prices increase Answer: D Difficulty: Easy 10. The type of environment where a large number of sellers produce and distribute virtually identical products and services is referred to as: A) Monopolistic competition B) Oligopolistic competition C) Price competition D) Pure competition Answer: D Difficulty: Easy 11. The seller of a product is a price taker in which of the following environment? A) Monopolistic competition B) Pure Competition C) Monopoly D) Oligopoly Answer: B Difficulty: Medium 12. The pricing strategy where a company initially sets the price of its product low and then raises it later on in the product's life cycle is called: A) price skimming B) target pricing C) life-cycle pricing D) penetration pricing Answer: D Difficulty: Easy 13. Life-cycle pricing: A) attempts to establish a price that can be maintained throughout the life of the product B) sets the price high to begin with and then lowers it later on in the life of the product C) sets the price low to begin with and then raises it later on in the life of the product Ainsworth/Deines, Introduction to Accounting: An Integrated Approach, 4/e89Chapter 5: Strategic Planning Regarding