To determine a product selling price based on the total cost method,management should include:
A)Total production and nonproduction costs plus a markup.
B)Total production and nonproduction costs only.
C)Total production costs plus a markup.
D)Total nonproduction costs plus a markup.
E)Only a markup.

Question

Quizplus · Accepted Answer

The total cost method involves calculating the total production costs (including both direct and indirect costs) and non-production costs (such as marketing and administrative expenses), and then adding a markup (profit margin) to arrive at the selling price. Therefore, choice A, which includes both production and non-production costs plus a markup, is the best choice.

To Determine a Product Selling Price Based on the Total