What cost concept used in applying the cost-plus approach to product pricing includes only total manufacturing costs in the cost amount to which the markup is added?
A) variable cost concept
B) total cost concept
C) product cost concept
D) opportunity cost concept

Question

Quizplus · Accepted Answer

Product cost concept includes only the total manufacturing costs (direct materials, direct labor, and manufacturing overhead) in the cost amount used for markup calculation. This approach does not consider any other costs such as selling or administrative expenses.

What Cost Concept Used in Applying the Cost-Plus Approach to Product