What are the different income-distribution patterns? How does income distribution in the economies affect the marketing decision of the firms?
What will be an ideal response?
Marketers often distinguish countries using five income-distribution patterns:
1. very low incomes
2. mostly low incomes
3. very low, very high incomes
4. low, medium, high incomes
5. mostly medium incomes
The market would be very small in countries with type 1 or 2 income patterns and will be considerably large in the countries with income patterns 3 and 4. In countries which have a marked inequality in income distribution, companies tend to produce goods which are consumed by the mass as well as produce certain luxurious goods to cater to the richer section.
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The Mighty Music Company produces and sells a desktop speaker for $100. The company has the capacity to produce 50,000 speakers each period. At capacity, the costs assigned to each unit are as follows: Unit level costs$45 Product level costs$15 Facility level costs$5 The company has received a special order for 500 speakers. If this order is accepted, the company will have to spend $15,000 on additional costs. Assuming that no sales to regular customers will be lost if the order is accepted, at what selling price will the company be indifferent between accepting and rejecting the special order?
A. $45 B. $60 C. $75 D. $95
Positive word-of-mouth advertising from a company's delighted customers is more effective than an advertising campaign developed by a company
Indicate whether the statement is true or false
Comet Company accumulated the following account information for the year: Beginning raw materials inventory$6,000 Indirect materials cost 2,000 Indirect labor cost 5,000 Maintenance of factory equipment 2,800 Direct labor cost 7,000 Using the above information, total factory overhead costs equal:
A. $16,800. B. $13,000. C. $15,800. D. $7,800. E. $9,800.
Cleveland Choppers manufactures two types of motorcycles, a Base and a Loaded model. The following activity and costs have been gathered:ProductNumber ofComponentsNumber ofSetupsNumber ofDirect Labor HrsBase 15 20 700 Loaded 25 40 600 Overhead costs$27,000 $22,500 The number of components and number of setups are chosen as activity-cost drivers for overhead. Assuming an ABC costing system is being used, what is the total overhead cost assigned to the Base model?
A. $15,450. B. $17,625. C. $21,375. D. $13,500. E. $15,625.