What cost concept used in applying the cost-plus approach to product pricing covers selling expenses, administrative expenses, and desired profit in the markup?
A) total cost concept
B) product cost concept
C) variable cost concept
D) sunk cost concept

Question

Quizplus · Accepted Answer

The product cost concept is used in the cost-plus approach to product pricing, which includes all costs related to the production of the product, including direct materials, direct labor, and manufacturing overhead. In addition to these costs, the cost-plus approach also includes selling expenses, administrative expenses, and desired profit in the markup. Therefore, the product cost concept is the best choice for this question.

What Cost Concept Used in Applying the Cost-Plus Approach to Product