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 as it does not take into account all costs associated with producing a product, including fixed costs. It is more suitable for pricing special orders where all costs associated with producing the product are known, but it may not be the best approach for setting regular prices. A, B, and D are all valid reasons for using the variable cost-plus approach.

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