The pricing method that establishes selling prices based on a specified rate of return on the assets employed in the operation is
A)target cost pricing.
B)return on assets pricing.
C)time and materials pricing.
D)gross margin pricing.

Question

Quizplus · Accepted Answer

The pricing method that establishes selling prices based on a specified rate of return on the assets employed in the operation is known as return on assets pricing. This approach ensures that the company generates sufficient profits to cover its costs and earn a designated rate of return on its assets. Target cost pricing sets prices based on desired profit margins, time and materials pricing relies on the actual cost of labor and materials used, and gross margin pricing determines prices based on the difference between the cost of goods sold and the selling price.

The Pricing Method That Establishes Selling Prices Based on a Specified