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Pricing

Professor Leticia Togba, CPA
ACCT 2302 - Principles of Managerial Acctng
Ch. 21 (3E) and Ch. 22 (2E)
Across
______ Cost: The cost that will provide the desired profit on a product when the seller does not have control over the product's price.
Contracting with an external party to provide a good or service, rather than performing the work internally.
Cost-______ Pricing: A process whereby a product's selling price is determined by adding a markup to a cost base.
Step #1 for Time-and-Material Pricing: _________ the labor rate.
__________ Transfer Price: A transfer price that is determined by the agreement of the division managers.
_______-____-________ Pricing: An approach to cost-plus pricing in which the company uses two pricing rates, one for the labor used on a job and another for the material.
_________ Cost: The contribution margin on sales to outside customers that would be forgone as a result of an internal transfer.
________-______ Transfer Price: A transfer price that uses as its foundation the costs incurred by the division producing the goods.
Step #2 for Time-and-Material Pricing: Calculate the Material ________ Charge.
_______-Based Transfer Price: A transfer price that is based on existing market prices of competing products.
Down
The amount added to a product's cost base to determine the product's selling price.
________ Price: the price used to record the transfer of goods between two divisions or a company.
_____-Cost Pricing: An approach to pricing that defines the cost base as all costs incurred.
__________-Cost Pricing: An approach to pricing that defines the cost base as the manufacturing cost; it excludes both variable and fixed selling and administrative costs.
Step #3 for Time-and-Material Pricing: Calculate charges for a __________ job.
________ Loading Charge: A charge added to cover the cost of purchasing, receiving, handling, and storing materials, plus any desired profit margin on the materials themselves.
Target ______ ________: The selling price that will provide the desired profit on a product when the seller has the ability to determine the product's price.
________-Cost Pricing: An approach to pricing that defines the cost base as all variable costs; it excludes both fixed manufacturing and fixed selling and administrative costs.