To what amount does a company set a price equal if it uses a cost-plus approach to pricing?
A)Total costs incurred
B)Variable product costs plus a markup for profit
C)Estimated total costs plus a markup for profit
D)Total variable costs plus a share of the fixed costs

Question

Quizplus · Accepted Answer

Cost-plus pricing involves adding a markup to estimated total costs to determine the selling price. This ensures all costs are covered and provides a profit margin. Option A and D do not incorporate a markup for profit, while option B only includes variable costs and not all costs incurred.

To What Amount Does a Company Set a Price Equal