Suppose that the watchband department of Timex sells completed watchbands to the finished watch department. The finished watch department is charged the price it would have to pay an outside watchband manufacturer less a discount to reflect low sales and transportation costs. This method of pricing is called ____ pricing.
A) zone
B) actual full cost
C) standard full cost
D) cost plus investment
E) market-based cost

Question

Quizplus · Accepted Answer

The method described is market-based cost pricing, as the price is based on the cost of an outside manufacturer but with a discount to reflect lower sales and transportation costs.

Suppose That the Watchband Department of Timex Sells Completed Watchbands