The practice of accepting a selling price when there is excess capacity,as long as it exceeds variable cost is called:
A)Contribution pricing.
B)Differential pricing.
C)Capacity pricing.
D)Special pricing.

Question

Quizplus · Accepted Answer

This practice is known as contribution pricing because it focuses on covering variable costs and contributing the surplus to fixed costs and profits.

The Practice of Accepting a Selling Price When There Is