Many managers set prices by cost plus pricing.What is cost plus pricing? Assume it is a long run decision.
A) average cost per unit plus markup per unit
B) average target cost plus markup per unit
C) average cost per unit minus markup per unit
D) average target cost minus markup per unit

Question

Quizplus · Accepted Answer

Cost plus pricing is a pricing method in which the selling price of a product is determined by adding a markup to the cost per unit. In this method, the manager calculates the average cost per unit and then adds a markup (percentage or fixed amount) to get the selling price of the product. This method helps to ensure that the company earns a profit and covers all the costs associated with the production of the product. Choice A, average cost per unit plus markup per unit, is the correct option that reflects cost plus pricing.

Many Managers Set Prices by Cost Plus Pricing