When making a long-term cost plus pricing decision,a company should consider:
A) the upstream research and development cost.
B) the allocated portion of facility-level cost.
C) the direct manufacturing cost.
D) All of these answers are correct.

Question

Quizplus · Accepted Answer

Businesses incur upstream costs before-and downstream costs after-goods are manufactured.To continue in business,companies must sell products at prices that exceed the total cost to develop,make,and sell them.That total cost includes the product cost (made up of direct materials,direct labor,and allocated overhead costs)and upstream costs such as those for research and development.

When Making a Long-Term Cost Plus Pricing Decision,a Company Should