The marginal cost method of pricing considers the direct costs of producing and selling products for export. What costs need to be excluded in these direct costs?
A) currency fluctuations
B) potential government regulations in future legislative sessions
C) fixed costs, R&D and domestic overhead
D) weather forecasts, especially in regards to El Nino

Question

Quizplus · Accepted Answer

The marginal cost method of pricing only considers the direct costs of producing and selling products for export. Therefore, fixed costs, R&D and domestic overhead should be excluded as they are not directly related to the production and sale of the product. Currency fluctuations and potential government regulations in future legislative sessions are external factors that are difficult to predict and should not be included in the direct costs. Weather forecasts are also unrelated to the production and sale of the product and should not be included.

The Marginal Cost Method of Pricing Considers the Direct Costs