In the cost-plus pricing approach, the desired ROI per unit is calculated by multiplying the ROI percentage by
A)fixed costs.
B)total assets.
C)total costs.
D)variable costs.

Question

Quizplus · Accepted Answer

The desired ROI per unit is calculated by multiplying the ROI percentage by total costs. This is because total costs include both fixed and variable costs and provide a more accurate calculation of the total investment required for each unit produced. Multiplying the ROI percentage by fixed costs or variable costs alone would not take into account the full picture of the cost of production. Similarly, total assets are not directly related to the per-unit ROI calculation.

In the Cost-Plus Pricing Approach, the Desired ROI Per Unit