In cost-plus pricing, the markup percentage is computed by dividing the desired ROI per unit by the
A) fixed cost per unit.
B) total cost per unit.
C) total manufacturing cost per unit.
D) variable cost per unit.

Question

Quizplus · Accepted Answer

The markup percentage in cost-plus pricing is computed by dividing the desired ROI per unit by the total cost per unit, which includes both fixed and variable costs. This ensures that the business is covering all expenses and generating a profit above and beyond those costs. Therefore, option B is the best choice.

In Cost-Plus Pricing, the Markup Percentage Is Computed by Dividing