The reasons for using the variable cost-plus approach include all of the following except this approach:
A)avoids arbitrary allocation of common fixed costs to individual product lines.
B)is more consistent with cost-volume-profit analysis.
C)provides the most defensible bases for justifying prices to all interested parties.
D)provides the type of data managers need for pricing special orders.

Question

Quizplus · Accepted Answer

The variable cost-plus approach does not provide the most defensible bases for justifying prices to all interested parties because it focuses on covering variable costs and adding a markup, rather than including all costs (both fixed and variable) that might be necessary to justify prices fully.

The Reasons for Using the Variable Cost-Plus Approach Include All