Understanding Business - Final Exam
Set Questions and Answers Latest
Update
Cost of Goods Sold (or Cost of Goods Manufactured) - Answer-A measure of the
cost of merchandise sold or cost of new materials and supplies used for producing
items for resale.
Gross Profit (Gross Margin) - Answer-How much a firm earned by buying (or making)
and selling merchandise.
Operating Expenses - Answer-Costs involved in operating a business such as rent
utilities and salaries.
Statement of Cash flows - Answer-A Financial statement that reports cash receipts
and disbursements related to a firm's three major activities, operations, investments
and financing.
Cash Flow - Answer-The difference between cash coming in and cash going out of
the business.
Depreciation - Answer-The systematic write-off of the cost of a tangible asses over
its estimated useful life.
First in - First out (FIFO) - Answer-An accounting method for calculating cost of
inventory. It assumes that the first goods to come in are the first to go out.
Last in, First out (LIFO) - Answer-An accounting method for calculating cost of
inventory. It assumes that the last goods to come in are the first to go out.
Ratio Analysis - Answer-The assessment of a firm's financial condition and
performance through calculations and interpretations of financial ratios developed
from the firm's financial statements.
value - Answer-Good quality at a fair price. When consumers calculate the value of a
product, they look at the benefits and then subtract the cost to see if the benefits
exceed the costs.
Total Product Offer - Answer-Everything that consumers evaluate when deciding
whether to buy something; also called a value package.
Product Line - Answer-A group of products that are physically similar or are intended
for a similar market.
Product Mix - Answer-The combination of product lines offered by a manufacturer.
,Product Differentiation - Answer-The creation of real or perceived product
differences.
Convenience Goods and Services - Answer-Products that the consumer wants to
purchase frequently and with a minimum of effort.
Shopping Goods and Services - Answer-Those products that the consumer buys
only after comparing value, quality, price, and style from a variety of sellers.
Specialty Goods and Services - Answer-Consumer products with unique
characteristics and brand identity. Because these products are perceived as having
no reasonable substitute, the consumer puts forth a special effort to purchase them.
Unsought Goods and services - Answer-Products that consumers are unaware of,
haven't necessarily thought of buying, or find that they need to solve an unexpected
problem.
Industrial Goods - Answer-Products used in the production of other products.
Sometimes called business goods or B2B goods.
brand - Answer-A name, symbol, or design (or combination thereof) that identifies
the goods or services of one seller or group of sellers and distinguishes them from
the goods and services of competitors.
Brand Name - Answer-That part of the brand consisting of a word, letter, or group of
words or letters comprising a name that differentiates a seller's goods or services
from those of competitors.
trademark - Answer-A brand that has been given exclusive legal protection for both
the brand name and the pictorial design.
Manufacturers' Brand Names - Answer-The brand names of manufacturers that
distribute products nationally.
Dealer (Private-Label) brands - Answer-Products that don't carry the manufacture's
name but carry a distributor or retailer's name instead.
Generic Goods - Answer-Non-branded products that usually sell at a sizable
discount compared to national or private-label brands.
Knockoff Brands - Answer-Illegal copies of national brand-name goods.
Brand Equity - Answer-The combination of factors-such as awareness, loyalty,
perceived quality, images, and emotions-that people associate with a given brand
name.
Brand Loyalty - Answer-The degree to which customers are satisfied, like the
brand ,and are committed to further purchase.
, Brand Awareness - Answer-How quickly or easily a given brand name comes to
mind when a product category is mentioned.
Brand Association - Answer-The linking of a brand to other favorable images.
Brand Manager - Answer-A manager who has direct responsibility for one brand or
one product line; called a product manager in some firms.
Product Screening - Answer-A process designed to reduce the number of new
product ideas being worked on at any one time
Product Analysis - Answer-Making cost estimates and sales forecasts to get a
feeling for profitability of new-product ideas.
Concept Testing - Answer-Taking a product idea to consumers to test their reactions.
Commercialization - Answer-Promoting a product to distributors and retailers to get
wide distribution, and developing strong advertising and sales campaigns to
generate and maintain interest in the product among distributors and consumers.
Product Life Cycle - Answer-A theoretical model of what happens to sales and profits
for a product class over time.
Target Costing - Answer-Designing a product so that it satisfies customers and
meets the profit margins desired by the firm.
Competition-based Pricing - Answer-A pricing strategy based on what all the other
competitors are doing. The price can be set at, above, or below competitors' prices.
Price Leadership - Answer-The procedure by which one or more dominant firms set
the pricing practices that all competitors in an industry follow.
Break-even Analysis - Answer-The process used to determine profitability at various
levels of sales.
Total Fixed Costs - Answer-All the expenses that remain the same no matter how
many products are made or sold.
Variable Costs - Answer-Costs that change according to the level of production.
Skimming Price Strategy - Answer-Strategy in which a new product is priced high to
make optimum profit while there's little competition.
Penetration Strategy - Answer-Strategy in which a product is priced low to attract
many customers and discourage competition.
Everyday Low Pricing (EDLP) - Answer-Setting prices lower than competitors and
then not having any special sales.
Set Questions and Answers Latest
Update
Cost of Goods Sold (or Cost of Goods Manufactured) - Answer-A measure of the
cost of merchandise sold or cost of new materials and supplies used for producing
items for resale.
Gross Profit (Gross Margin) - Answer-How much a firm earned by buying (or making)
and selling merchandise.
Operating Expenses - Answer-Costs involved in operating a business such as rent
utilities and salaries.
Statement of Cash flows - Answer-A Financial statement that reports cash receipts
and disbursements related to a firm's three major activities, operations, investments
and financing.
Cash Flow - Answer-The difference between cash coming in and cash going out of
the business.
Depreciation - Answer-The systematic write-off of the cost of a tangible asses over
its estimated useful life.
First in - First out (FIFO) - Answer-An accounting method for calculating cost of
inventory. It assumes that the first goods to come in are the first to go out.
Last in, First out (LIFO) - Answer-An accounting method for calculating cost of
inventory. It assumes that the last goods to come in are the first to go out.
Ratio Analysis - Answer-The assessment of a firm's financial condition and
performance through calculations and interpretations of financial ratios developed
from the firm's financial statements.
value - Answer-Good quality at a fair price. When consumers calculate the value of a
product, they look at the benefits and then subtract the cost to see if the benefits
exceed the costs.
Total Product Offer - Answer-Everything that consumers evaluate when deciding
whether to buy something; also called a value package.
Product Line - Answer-A group of products that are physically similar or are intended
for a similar market.
Product Mix - Answer-The combination of product lines offered by a manufacturer.
,Product Differentiation - Answer-The creation of real or perceived product
differences.
Convenience Goods and Services - Answer-Products that the consumer wants to
purchase frequently and with a minimum of effort.
Shopping Goods and Services - Answer-Those products that the consumer buys
only after comparing value, quality, price, and style from a variety of sellers.
Specialty Goods and Services - Answer-Consumer products with unique
characteristics and brand identity. Because these products are perceived as having
no reasonable substitute, the consumer puts forth a special effort to purchase them.
Unsought Goods and services - Answer-Products that consumers are unaware of,
haven't necessarily thought of buying, or find that they need to solve an unexpected
problem.
Industrial Goods - Answer-Products used in the production of other products.
Sometimes called business goods or B2B goods.
brand - Answer-A name, symbol, or design (or combination thereof) that identifies
the goods or services of one seller or group of sellers and distinguishes them from
the goods and services of competitors.
Brand Name - Answer-That part of the brand consisting of a word, letter, or group of
words or letters comprising a name that differentiates a seller's goods or services
from those of competitors.
trademark - Answer-A brand that has been given exclusive legal protection for both
the brand name and the pictorial design.
Manufacturers' Brand Names - Answer-The brand names of manufacturers that
distribute products nationally.
Dealer (Private-Label) brands - Answer-Products that don't carry the manufacture's
name but carry a distributor or retailer's name instead.
Generic Goods - Answer-Non-branded products that usually sell at a sizable
discount compared to national or private-label brands.
Knockoff Brands - Answer-Illegal copies of national brand-name goods.
Brand Equity - Answer-The combination of factors-such as awareness, loyalty,
perceived quality, images, and emotions-that people associate with a given brand
name.
Brand Loyalty - Answer-The degree to which customers are satisfied, like the
brand ,and are committed to further purchase.
, Brand Awareness - Answer-How quickly or easily a given brand name comes to
mind when a product category is mentioned.
Brand Association - Answer-The linking of a brand to other favorable images.
Brand Manager - Answer-A manager who has direct responsibility for one brand or
one product line; called a product manager in some firms.
Product Screening - Answer-A process designed to reduce the number of new
product ideas being worked on at any one time
Product Analysis - Answer-Making cost estimates and sales forecasts to get a
feeling for profitability of new-product ideas.
Concept Testing - Answer-Taking a product idea to consumers to test their reactions.
Commercialization - Answer-Promoting a product to distributors and retailers to get
wide distribution, and developing strong advertising and sales campaigns to
generate and maintain interest in the product among distributors and consumers.
Product Life Cycle - Answer-A theoretical model of what happens to sales and profits
for a product class over time.
Target Costing - Answer-Designing a product so that it satisfies customers and
meets the profit margins desired by the firm.
Competition-based Pricing - Answer-A pricing strategy based on what all the other
competitors are doing. The price can be set at, above, or below competitors' prices.
Price Leadership - Answer-The procedure by which one or more dominant firms set
the pricing practices that all competitors in an industry follow.
Break-even Analysis - Answer-The process used to determine profitability at various
levels of sales.
Total Fixed Costs - Answer-All the expenses that remain the same no matter how
many products are made or sold.
Variable Costs - Answer-Costs that change according to the level of production.
Skimming Price Strategy - Answer-Strategy in which a new product is priced high to
make optimum profit while there's little competition.
Penetration Strategy - Answer-Strategy in which a product is priced low to attract
many customers and discourage competition.
Everyday Low Pricing (EDLP) - Answer-Setting prices lower than competitors and
then not having any special sales.
