Setting the price of a product or service by adding a fixed percentage to the total unit cost is referred to as
A) cost-plus fixed-fee pricing.
B) demand backward pricing.
C) cost-plus percentage-of-cost pricing.
D) experience curve pricing.
E) target return on investment pricing.

Question

Quizplus · Accepted Answer

Cost-plus percentage-of-cost pricing involves adding a fixed percentage to the total unit cost to set the price of a product or service. This method ensures that the price covers all the costs incurred in producing the product or service, as well as providing a markup for profit. It is a common method used in many industries and is relatively simple to calculate.

Setting the Price of a Product or Service by Adding