When cost-based pricing is employed and mark up is based on manufacturing costs, the mark up must be sufficiently large enough to:
A)cover selling expenses.
B)cover administrative expenses.
C)provide for the desired profit.
D)accomplish all of the above.

Question

Quizplus · Accepted Answer

When using cost-based pricing, the mark up needs to cover all direct and indirect costs such as manufacturing, selling, and administrative expenses, along with providing a desired profit. Therefore, the best choice is D as it includes all of the above.

When Cost-Based Pricing Is Employed and Mark Up Is Based