Identify a weakness of the average-cost approach.
A) It ignores competitors' costs and prices.
B) It does not consider historical values.
C) It does not add a reasonable markup to the average cost of a product.
D) It is not commonly used.
E) It is a complex method.

Question

Quizplus · Accepted Answer

The weakness of the average-cost approach is that it ignores competitors' costs and prices, which can result in setting prices too high or too low.

Identify a Weakness of the Average-Cost Approach