BA-M 224: PRICING STRATEGY

Asynchronous Quiz Midterm Period 2 (AQM2)

Total Earned Score: ____________
Total Perfect Score: 40 Points
Family Name, First Name, Middle Initial
Rallos, Nicole D.
Course/Year/Section
BSBA MM 2-A

General Directions:
1. Read and follow the General Directions carefully.
2. This Asynchronous Quiz Midterm Period 2 (AQM2) must be returned with complete answers.
3. Submit AQM2 in PDF or Word docs’ format to the CTU-Gmail of your Class President or to the assigned
Representative/Focal Person of your Class.
Example: AQM2_Costelo
4. Your Class President will then create and store all received AQM2 in one Digital Folder.
5. The said Digital Folder must be labeled appropriately.
Example: AQM2_BSBA 2-3
6. The labeled Digital Folder must be shared and/or forwarded by your Class President to this CTU-Gmail:
nereogilbert.delacruz@ctu.edu.ph(or shared to Google Drive) on or before May 8, 2022 (Sunday).
7. Forty percent (40%) from the Total Earned Score (TES) will be deducted for late submission of the
labeled Digital Folder.
8. Only the labeled Digital Folder submitted by your Class President will be considered OFFICIAL AQM2.
Individual late submission of AQM2 will be treated on a case to case basis likewise; General Directions
No.7 will still be enforced.
______________________________________________________________________________________
TEST DIRECTIONS:
A. Provide an appropriate answer and Complete Solutions/Computations for each Test Item.
B. There is NO CREDIT POINT for ANSWERS ONLY.

1. In the Province and Cities of Cebu, the Cost of riding a White Cab is Php 40.00 flat usage fee plus
Php 2.60 per 100 meters driven while the Cost of riding a Yellow Cab is Php 70.00 flat usage fee plus
Php 2.40 per 100 meters driven.

a. (5 Points) How many kilometers must be travelled to make the two (2) taxi cabs charge the
same amount or make the charge equal to each other?
Conversation:
1 kilometre= 1000 meters
1000/10=10

Since, 1 kilometre is equal to 1000 meters, then each Cab will gain (×10) on its additional change
for every 1 kilometre driven.

Variable Cost per kilometre travelled in Riding

a White Cab= Php 2.60(10)= Php 26.00
Variable Cost per kilometre travelled in Riding
a Yellow Cab= Php 2.40(10) = Php 24.00

FC+VC= FC+VC
FC+pq= FC+pq
40 +26(p)= 70+ 24(q)
26q - 24q= 70 - 40
2q/2= 30/2
q= 15 Kilometre
 Sincewe get 15 kilometres as the answer, then we must substitute q as 15 in the given formula,
while still referring to:

Variable Cost per kilometre travelled in Riding

a White Cab= Php 2.60(10) = Php 26.00
Variable Cost per kilometre travelled in Riding
a Yellow Cab= Php 2.40(10) = Php 24.00

Cost of riding a White Cab

C= FC + VC
= FC + pq
= 40 + 26 (15)
= 40 + 390
= Php 430.00

Cost of riding a Yellow Cab

C= FC + VC
= FC + pq
= 70 + 24 (15)
= 70 + 390
= Php 430.00

As a result, it must take 15 kilometre to be travelled to make the two taxi cab charge the same amount or
make the charge equal to each other.

Make a Comparative Table for Questions b and c:

(5 Points) If more kilometres are travelled, which taxi cab offers a better deal?

By using the formula

C= FC + VC
= FC + pq

While still referring to the following:

Variable Cost per kilometre travelled in Riding
a White Cab= Php 2.60 (10)= Php 26.00
Variable Cost per kilometre travelled in Riding
a Yellow Cab= Php 2.40 (10)= Php 24.00

b. (5 Points) If more kilometres are travelled, which taxi cab offers a better deal?

By using the formula

C= FC + VC
= FC + pq

While still referring to the following:

Variable Cost per kilometre travelled in Riding
a White Cab= Php 2.60 (10)= Php 26.00
Variable Cost per kilometre travelled in Riding
a Yellow Cab= Php 2.40 (10)= Php 24.00

Cost of Riding a White Cab for if more kilometer are travelled

kilometers Fixed cots Variable costs Total costs
16 Php 40.00 Php 26 (16) Php 456.00
17 Php 40.00 Php 26 (17) Php 482.00
18 Php 40.00 Php 26 (18) Php 508.00
19 Php 40.00 Php 26 (19) Php 534.00
20 Php 40.00 Php 26 (20) Php 560.00
21 Php 40.00 Php 26 (21) Php 586.00
22 Php 40.00 Php 26 (22) Php 612.00
 23 Php 40.00 Php 26 (23) Php 628.00
24 Php 40.00 Php 26 (24) Php 664.00
25 Php 40.00 Php 26 (25) Php 690.00

Cost of Riding a Yellow Cab if more kilometer are travelled

kilometers Fixed cots Variable costs Total costs
16 Php 70.00 Php 24 (16) Php 454.00
17 Php 70.00 Php 24 (17) Php 478.00
18 Php 70.00 Php 24 (18) Php 502.00
19 Php 70.00 Php 24 (19) Php 526.00
20 Php 70.00 Php 24 (20) Php 550.00
21 Php 70.00 Php 24 (21) Php 574.00
22 Php 70.00 Php 24 (22) Php 598.00
23 Php 70.00 Php 24 (23) Php 622.00
24 Php 70.00 Php 24 (24) Php 646.00
25 Php 70.00 Php 24 (25) Php 670.00

Based on the table above, the taxi cab that offers a better deal if more kilometres are travelled
is the Yellow Taxi Cab. As you can see on the table, for the White Taxi Cab, as your kilometers
travelled increase, its cost also increases. On the other hand, the Yellow Taxi Cab also increases
its cost as more kilometres are traveled, but its prices are cheaper compared to the White Taxi
Cab. This will conclude that choosing Yellow Taxi Cab is a cost-effective choice to save money
on travelling to faraway places that would estimate you in more kilometres travelled.

c. (5 Points) If fewer kilometres are travelled, which taxi cab offers a better deal?

 If fewer kilometers are travelled, white cab offers a better deal than the yellow cab for
the reason that it’s cheaper than the yellow cab as shown above.

2. A manufacturer spent Php 100,000.00 making 500 umbrellas. The Php 80,000.00 of Php 100,000.00
was variable costs and Php 20,000.00 was fixed costs.

To get the price per umbrella we will use the formula :

C = FC + VC
C = PHP 20,000.00 + PHP 80,000.00
C = PHP 100,000.00

Price = C/Q
P = PHP 100,000.00 / 500
P = PHP 200.00
PHP 200.00 is the price per umbrella.

a. (5 Points) Find the costs to make 600 umbrellas.

To find the cost to make 600 umbrellas we will use the formula :
C = PQ
C = PHP 200.00 for the price of umbrella per piece (600 for the quantity of the umbrella)
C = PHP 200.00 (600)
C = PHP 120,000.00
PHP 120,000.00 is the cost to make 600 umbrellas.

b. (5 Points) Find the costs to make 700 umbrellas.

To find the cost to make 700 umbrellas we will use the formula :
C = PQ
C = PHP 200.00 for the price of umbrella per piece (700 for the quantity of the umbrella)
C = PHP 200.00 (700)
C = PHP 140,000.00
PHP 140,000.00 is the cost to make 700 umbrellas.

c. (5 Points) Find the costs if no umbrellas were made.

 PHP 20,000.00 because this is a fixed cost amount whether you produce a product or
not.
3. Southern Manufacturing Corporation produces a Total of 5,800 Jackets for Men per Month. Their
Quality Officer had noticed that Substandard Jacket for Men is 8 percent of the Total Jacket produced.

a. (5 Points) Determine the number of substandard Jackets produced per month.

No. of substandard jackets = Total QTY x % of total substandard jackets produced
N = 5,800 x 8%
N = 5,800 x 0.08
N = 464
There are 464 substandard jackets produced per month.

b. (5 Points) If the Company will decide to sell all the substandard Jackets for Twelve Hundred
pesos per Jacket, What will be their expected Revenue?
Revenue = Selling Price x Number of Units Sold
R = PHP 1,200.00 x 464
R = PHP 556,800.00
The company’s expected revenue is PHP 556,800.00 if they will decide to sell all their substandard
jackets.