EN 108 – PRICING AND COSTING 7.
This is product costing, inventory valuation, and
G1: Module 4: COST-VOLUME-PROFIT (CVP)
ANALYSIS
Identification:
1. It is one of the features of CVP Analysis where it
calculates the break-even point, which is the level
of sales at which total revenue equals total cost.
= Break-even Analysis
2. These are the cost that don't flactuate, examples
are rent and advertising. = Fixed cost
3. It is a way to find out how changes in variable
and fixed cost affect a firms profit. =CVP Analysis
/ Cost-Volume-Profit Analysis
4. One of the CVP Analysis where it determines
the level of sales needed to achieve specific profit
or to break-even. = Profit Determination
5. This is where we can see the number of
products that businesses sell during specific
period. = Sales Volume
6. Where are the sales and total costs plotted?
= Y-axis
7. It is a graphical representation of the CVP
Analysis. = CVP chart
8. What is the formula of Break-even analysis.
9. A technique used to determine how changes in
input variables affect the output of a particular
model. = Sensitivity Analysis
10. Meaning of CVP = Cost-volume-profit
G2: MODULE 5: COST ACCOUNTING CYCLE
True or False:
1. Work in Process Inventory are all manufacturing
cost incurred and assigned to products being
produced? = True
2. Materials Inventory this account is maintained in
much the same way as the Merchandise Inventory
account? = True
3. Materials Inventory are the most manufacturing
companies use the perpetual inventory approach?
= False
4. Finished Goods Inventory account, like
Materials Inventory, has same Characteristics of
the Merchandise Inventory account? = True
5. Merchandise Inventory account is made up of
the balances of materials and supplies on hand?
= False
6. It is includes all Cost related to the
Manufacturing of a product except direct materials
and direct labor. = Factory Overhead
financial reporting depend on a defined structure
flow of manufacturing costs.
= Manufacturing Cost Flow
8-10. What are the 3 elements of manufacturing
costs? = Direct material, Direct labor, Factory
overhead
11-15. If the Amount is Php 50,000.00 and the
Units Produced is 2,000 how much is the Unit
Cost? = ₱ 25
Solution: Amount 50,000 ÷ Unit Produced 2,000 =
Unit Cost ₱ 25
16-20. If the Amount is Php 30,000.00 and the Unit
Cost is Php 30.00 how much is the Units
Produced? = ₱ 1,000
Solution: Amount 30,000 ÷ Unit Cost 30 = Unit
Produced ₱ 1,000
21-25. If the Units Produced is 5,000 and the Unit
Cost is Php 50.00 how much is the Amount?
= ₱ 25,000.00
Solution: Units Produced 5,000 x Unit Cost 50 =
Amount ₱ 250,000
G3: ECONOMIC VALUE
Identification:
1. The value at the heart of pricing strategy is not
use value, but is what economists call ____ or
economic value. = Exchange Value
2. It depends on the alternatives customers have
available to satisfy the same need.
= Economic Value
3. The term ___ commonly refers to the overall
satisfaction that a customer receives from using a
product or service offering. = Value
4. It represents the total cost savings or income
enhancements that a customer accrues as a result
of purchasing a product. This is the most important
element for most business to business purchases.
= Monetary Value
5. It refers to the many ways that a product creates
innate satisfaction for the customer. A Rolex watch
may not create any tangible monetary benefits for
most customers, but a certain segment of watch
wearers derives deep psychological benefit from
the prestige and beauty associated with ownership
to which they will ascribe some economic growth.
= Psychological Value
6. A product's total economic value is calculated as
the price of the customer’s best alternative (the
reference value) plus the worth of whatever
differentiates the offering from the alternative (the
differentiation value). = Value Creation
7. It identify the next best competitive alternative to
your product and gathering accurate reference
prices, while conceptually simple, offers a number
of challenges that often trip up pricing strategies.
= Competitive Reference Prices
8. After determining the competitive reference
prices, the next step is to gain a detailed
understanding of customer value drivers and
translate that understanding into quantified
estimates that can be used to support pricing
decisions. The goal is to develop value driver
algorithms, the formulas and calculations that
estimate the differentiated monetary worth of each
unit of product performance.
= Estimating Monetary Value
9. It is one of the most important tasks in
marketing. Identifying and describing market
subgroups in a way that guides marketing and
sales decision-making makes the marketing and
pricing process much more efficient and effective.
= Market Segmentation
Enumeration:
10-15: GIVE THE SIX-STEPS PROCESS OF
MARKET SEGMENTATION.
= Step 1: Determine basic segmentation Criteria
= Step 2: Identifying discriminating value drivers
= Step 3: Determine your operational constraints
and advantages
= Step 4: Create primary and secondary segments
= Step 5: Create detailed segment descriptions
4. A buyer’s price sensitivity is influenced by the
importance of the benefit that they are trying to
derive from their purchase.
A. Price Quality Effect
B. Expenditure Effect
C. End-Benefit Effect
5. The expenditure effect states that buyers are
more price sensitive when the expenditure is
larger, either in dollar terms or as a percentage of
available budget.
A. Price Quality Effect
B. Expenditure Effect
C. End-Benefit Effect
True or False:
1. Product Characteristic can have a great effect
on sales and price realization when your product or
service creates value that is not otherwise obvious
to potential buyers. = False
2. In Fairness Effect states that the concept of a
“fair price” has bedeviled marketers for centuries.
= True
3. In adapting the message for product
characteristics there are two (2) dimensions that
frame a communications strategy. = True
4. University Education, Investment advice, and
Medical Devices are examples of High
Involvement, Economic Benefits. = True
5. For bonus question provide the complete title of
module 7 reported by Group 4.
= Price and Value Communication

= Step 6: Develop segment metrics and fences

G4: Module 7: Price and Value Communication

Multiple Choice:

1. The consumers take more time and trouble

buying a product before deciding a puchase.
A. HIGH-INVOLVEMENT, PSYCHOLOGICAL
BENEFITS
B. LOW-INVOLVEMENT, PSYCHOLOGICAL
BENEFITS

2. This products are usually inexpensive and pose

a low risk to the buyer if he or she makes a
mistake by purchasing them.
A. LOW-INVOLVEMENT, ECONOMIC BENEFITS
B. HIGH-INVOLVEMENT, ECONOMIC BENEFITS

3. It states that the smaller the portion of the

purchase price buyers must pay themselves, the
less price sensitive they are.
A. Transaction Value Effect
B. Shared Cost Effect
C. Fairness Effect