What costs can be justified when managers initially set prices to cover the costs plus a profit and then subsequently adjusts the prices to reflect market conditions?
A)Variable costs
B)Fixed costs
C)Full costs
D)Absorption costs

Question

Quizplus · Accepted Answer

Full costs, which include both variable and fixed costs, are considered when setting prices initially to cover costs plus a profit. This approach ensures that all expenses are accounted for before adjusting prices based on market conditions.

What Costs Can Be Justified When Managers Initially Set Prices