EMP Batch 19 Customisation Phase
Subject: Strategic Cost Management Marks: 50
Time: 90 min Date: 29/07/2010
It is an open book exam.
PART A: each carries 2 marks 20 marks
PART B : each carries 10 marks 20 marks
PART C : each carries 5 marks 10 marks
PART A (20 Marks)
I. State true or false. Give brief explanation for your choice. (2 marks each)
1. Relevant costs for pricing decisions include manufacturing costs, but not costs from other value-chain functions.
2. When prices are set in a competitive marketplace, product costs are the most important influence on pricing decisions.
3. Relevant costs of a bidding decision should exclude revenues lost on lower-priced sales to existing customers.
4. Companies that operate in very competitive environments use a market-based approach when making their long-run pricing decisions.