The cost-plus pricing approach's major advantage is
A) it considers customer demand.
B) that sales volume has no effect on per unit costs.
C) it is simple to compute.
D) it can be used to determine a product's target cost.

Question

Quizplus · Accepted Answer

The cost-plus pricing approach is simple to compute as it involves adding a markup percentage to the cost of producing a product. However, it does not consider customer demand or the effect of sales volume on per unit costs. It also cannot be used to determine a product's target cost, which is the cost at which the product must be sold to meet a specific profit margin.

The Cost-Plus Pricing Approach's Major Advantage Is