The return on assets pricing method
A)has very little appeal and support.
B)has a primary objective of earning a minimum rate of return on assets.
C)is a crude approach to pricing and should be used as a last resort.
D)replaces the desired rate of return used in cost-based pricing methods with a desired profit objective.

Question

Quizplus · Accepted Answer

The return on assets pricing method has a primary objective of earning a minimum rate of return on assets, which makes it a viable option for businesses that want to keep a close eye on their assets' profitability. This method is not considered crude and is often used by businesses as a pricing strategy. Choice A is incorrect as the return on assets pricing method does have appeal and support. Choice C is incorrect as the return on assets pricing method is not crude and is not used as a last resort. Choice D is incorrect as the method does not replace the desired rate of return used in cost-based pricing methods with a desired profit objective.

The Return on Assets Pricing Method