Full-cost pricing is more widely used in practice than the contribution margin approach to pricing.

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Full-cost pricing takes into account all costs, both fixed and variable, when determining the price of a product or service. This approach is more practical as businesses need to cover all their costs to make a profit. Contribution margin pricing only considers the variable costs associated with producing and selling a product or service. While contribution margin pricing may be useful for short-term decision-making, it may not accurately reflect the true cost of producing a product or service over the long term.

Full-Cost Pricing Is More Widely Used in Practice Than the Contribution