Cost-based pricing is a pricing method that:
A)applies a mark-up to the calculation of the product or service cost
B)seeks to establish prices at what the customer is willing to pay
C)determines the minimum amount a customer will pay
D)none of the options is true

Question

Quizplus · Accepted Answer

Cost-based pricing calculates the cost of producing a product or service, including all expenses such as materials, labor, overhead costs, and adds a markup to ensure a profit. The markup can be a percentage or a fixed amount that covers the company's fixed or variable costs and generates a profit margin. It is a widely used pricing strategy in manufacturing, retail, and service industries.

Cost-Based Pricing Is a Pricing Method That