Question 1: The time component under time-and-material pricing includes a
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portion of the materials clerk's wages.
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charge for receiving, handling, and storing materials.
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Question 2: All of the following are correct statements about transfers between divisions located in countries with different tax rates except that
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many companies prefer to report more income in countries with low tax rates.
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a decreasing number of transfers are between divisions located in different countries.
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companies must pay income tax in the country where income is generated.
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differences in tax rates across countries complicate the determination of the appropriate transfer price.
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Question 3: All of the following are correct statements about the target price except it
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is determined after the company has identified its market and does market research.
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is determined after the company sets its desired profit amount.
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is used to determine a product's target cost.
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is the price the company believes would place it in the optimal position for its target audience.
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Question 4: Lock Inc. has collected the following data concerning one of its products:
| Unit sales price |
$145 |
| Total sales |
15,000 units |
| Unit cost |
$115 |
| Total investment |
$1,800,000 |
The ROI percentage is