Which of the following is not a problem associated with cost-based pricing?
A)The procedure is illogical because a sales estimate is made before a price is set
B)It focuses on internal costs rather than customers' willingness to pay
C)It leads to an increase in price as sales fall
D)It attempts to undertake break even analysis

Question

Quizplus · Accepted Answer

Cost-based pricing focuses on covering costs and achieving a desired profit margin, rather than analyzing customer demand or market conditions. Undertaking break-even analysis is a common and logical step in cost-based pricing to determine the minimum sales volume needed to cover costs, not a problem associated with it.

Which of the Following Is Not a Problem Associated with Cost-Based