Module 5: Strategic Pricing and Profitability Analysis

Quiz 50 points

1. These are expenses that remain constant regardless of the level of production or sales. Common examples include
rent or lease payments, salaries of permanent staff, insurance premiums, and depreciation on assets.
A. Variable cost
B. Fixed cost
C. Operating cost
D. Mixed cost
2. It is also known as mixed costs, which are expenses that have both fixed and variable components. This means that
part of the cost remains constant, regardless of the level of production or sales, while another part varies with changes
in production or sales volume.
A. Cost of goods sold
B. Semi-variable cost
C. Fixed cost
D. Variable cost
3. It is a fundamental economic concept that represents the additional cost incurred when producing one more unit of a
good or service.
A. Marginal cost
B. Operating cost
C. Semi-variable cost
D. Mixed cost
4. This is the comprehensive sum of all costs incurred by a business in the production of goods or the provision of
services. It encompasses both variable costs and fixed costs and is a critical concept in economics and accounting.
A. Total Cost
B. Cost of Goods Sold
C. Fixed Cost
D. Marginal Cost
5. Also known as indirect costs, they refer to the ongoing operational expenses that a business incurs to support its day-
to-day operations but are not directly tied to producing a specific product or service.
A. Variable cost
B. Overhead cost
C. Operating cost
D. Fixed cost
6. Price sensitivity of consumers -
A. Inelastic demand
B. Elasticity of demand
C. Demand and supply
7. It is a set of rules made by the government to ensure fair competition and to protect consumers.
A. Economic conditions
B. Regulatory environment
C. Competitive landscape
8. State of a specific market in a specific time.
A. Market preference
B. Market conditions
C. Seasonal trends
9. Adjusting prices in real time based on demand, market conditions or other factors. -
A. Static pricing
B. Dynamic pricing
C. Overpricing
10. It drive sales and capture market share while maintaining profitability. -
A. Price segmentation
B. Promotions and discount
C. Cost analysis
11. Price- fixing, deceptive pricing and unfair practices can lead to damage to company'ss reputation.
A. Customer loyalty
B. Legal and ethical consideration
C. Differentiation
12. It is an analytical process reveal information about various revenue streams of an organization.....
A. Profitability analysis
B. Demand analysis
C. Competitor analysis
13. This determines how resources are allocated .....
A. Cost
B. Cost analysis
C. Cost management
14. Net income over/net sale x 100 is the formula of...
A. Cost calculation
B. Cost structure
C. Profit margin calculation
15.It is the ability to adapt any changes on the market....
A. Adaptation to market changes
B. Market positioning
C. Market segmentation
16. Involves evaluating the profitability of individual customers.
A. Customers segmention
B. Profitability across products
C. Profitability across customers
D. Both a&c
17.This focus on retaining and nurturing high-profit customers, consider strategies to increase the profitability of low-
profit customers, and evaluate the cost-effectiveness of retaining unprofitable customers.
A. Personalization
B. Strategic decisions
C. Profit margin analysis
D. Data collection
18. Continuously monitor and update your customer profitability analysis to adapt to changing customer behavior and
market conditions.
A. Regular review
B. Customer profitability analysis
C. Personalization
D. Customer segmentation
19. How do we calculate profit calculation in profitability across customers?
A. Subtracting the revenue from the total costs of purchases
B. Subtracting the total costs from the revenue associated with their purchases
C. Dividing their profit by their total revenue
D. Adding the total profit from the revenue
20. How do we calculate the profit margin analysis in profitability across customers?
A. Dividing their total revenue from their profit
B. Dividing their profit by their total revenue
C. Subtracting their profit by their total revenue
D. Subtracting their total revenue from their profit
21. Contribution Margin is calculated as:
A. Sales Revenue - Fixed Costs
B. Sales Revenue - Variable Costs
C. Sales Revenue / Variable Costs
D. Variable Costs - Sales Revenue
E. Sales Revenue / Fixed Costs
22. Which of the following statements is TRUE about the contribution margin?
A. It represents the amount from each sale that contributes to fixed costs.
B. It's the difference between total sales and total costs.
C. It can be negative if sales are low.
D. It remains constant regardless of sales volume.
E. It is calculated as total sales minus total variable and fixed costs.
23. If the company has a sales revenue 25,000.00 and a contibution margin 10,000.00, how much would be the variable
cost?
A. 5,000.00
B. 10,000.00
C. 15,000.00
D. 20,000.00
E. 25,000.00
24. How much was the contribution margin if you have a 100,000.00 sales revenue and 77,803.00 variable costs?
A. 23,197.00
B. 22,187.00
C. 21,777.00
D. 37,337.00
E. 22,197.00
25. It refers to the financial tool used by business to assess the profitability of their products, services, or business
segments.
A. Break-even Analysis
B. Contribution Margin Analysis
C. Sales Revenue
D. Fixed costs
E. None of the above
26. It helps a business determine the level of sales needed to cover both variable and fixed costs, resulting in zero profit
or loss.
A. Contribution margin analysis
B. Break even analysis
C. Variance analysis
D. Historical data analysis
27. It is a method of pricing a product or service based on its value to the consumer or another competitive approach.
A. Market pricing
B. Cost structure
C. Strategic pricing
D. Sales revenue
28. It is a critical tool that allows business owners to review their financial performance and compare it to that of the
organization's peers.
A. Profitability analysis
B. Market research
C. Price segmentation
D. Cost analysis
29. This refers to the various expenses and expenditures that a business incurs in the course of its expenditures.
A. Demand analysis
B. Dynamic pricing
C. Profitability
D. Cost structures
30. The purpose of break even analysis is to:
A. Helps businesses understand how much revenue is available to cover fixed costs.
B. Helps a business identify the point at which it starts making a profit and assess the risk associated with a
particular business venture.
C. Monitor and update the profitability analysis.
D. Allocate resources to the most profitable segments.
31. What is the primary objective of assessing profitability across products in a business?
A. To increase production costs
B. To maximize marketing expenses
C. To identify the most profitable products
D. To analyze online sales platforms
32. In the step-by-step process for assessing profitability across products, which step involves gathering data on the
revenue generated by each product?
A. Data Collection
B. Cost Analysis
C. Profit Calculation
D. Profit Margins
33. What is included in the "Cost Analysis" step of assessing profitability across products?
A. Calculating revenue
B. Determining online sales platforms
C. Estimating labor costs
D. Analyzing profit margins
34. How do you calculate the profit for each product in the profitability assessment process?
A. By dividing total costs by total revenue
B. By subtracting total costs from total revenue
C. By calculating direct and indirect costs
D. By analyzing profit margins
35. What does the "Profit Margins" step of the assessment process help you understand?
A. The total revenue generated
B. The percentage of profit relative to sales
C. The labor and marketing expenses
D. The most profitable products
36. In the final step of assessing profitability across products, what kind of decisions are made based on the analysis?
A. Decisions to maximize marketing expenses
B. Decisions to discontinue all products
C. Decisions to optimize less profitable products
D. Decisions to focus on increasing production costs
37. This refers to discontinue low-profit products and invest more in high-profit products?
A. Profit margin analysis
B. Product portfolio optimization
C. Market trends and opportunities
D. Segmentation criteria
38. In the benefits of understanding profitability across segments, products and customers (which is the C-R-I-I-M ) , M
stands for?
A. Market Trends
B. Mitigation Risks
C. Margin analysis
D. Monitoring opportunities
39. This are under informed decision making :
l. Data collection
ll. Customer segmentation
lll. Profitability analysis
lV. Profit calculation
A. l & lll
B. ll & lll
C. l, ll, lll
D. All of the above
40. In the benefits of understanding profitability across segments, products and customers (which is the C-R-I-I-M ), C
stands for?
A. Cost management
B. Conceptual framework
C. Competitive advantage
D. Customer demographics
41. In the benefits of understanding profitability across segments, products and customers (which is the C-R-I-I-M ) , R
stands for?
A. Relevant data
B. Resource allocation
C. Revenue earned
D. Resource optimization
42. What is a key strategy for businesses to adapt to market changes effectively?
A. Maintaining the status quo
B. Avoiding customer feedback
C. Embracing innovation and new technologies
D. Ignoring competitor analysis
43. What does regular market research help businesses to understand?
A. Their unchanging customer base
B. Outdated industry practices
C. Emerging market trends and customer preferences
D. Overestimation of product value

44. What role does flexibility play in adapting to market changes?

A. Hindering business growth
B. Slowing down decision-making processes
C. Enabling quick adjustments to changing conditions
D. Increasing operational costs unnecessarily
45. Which approach is crucial for adapting to market changes effectively?
A. Relying solely on traditional advertising
B. Reacting impulsively to market fluctuations
C. Planning and implementing agile strategies
D. Sticking to a rigid long-term plan
46. What is the importance of customer feedback in adapting to market changes?
A. It creates unnecessary complications
B. It helps in maintaining existing strategies
C. It provides insights into evolving customer needs and preferences
D. It increases overall operational costs
47. Strategic pricing involves setting prices based on cost considerations alone.
A. TRUE
B. FALSE
48. Profitability analysis is important in understanding how pricing strategies impact a company's overall financial
performance.
A. TRUE
B. FALSE
49. In strategic pricing, it's important to consider factors such as market demand, customer behavior, and competitive
pricing.
A. TRUE
B. FALSE
50. Dynamic pricing involves adjusting prices in real-time based on supply and demand fluctuations.
A. TRUE
B. FALSE