Vandelay Industries manufactures a range of latex products. To set the price of its products, George, the CEO of Vandelay, calculates the total cost associated with the manufacturing of each product, then multiples that by 1.5 to get the sales price. Therefore, a product that cost $10 manufacture would sell for $15. Vandelay is using:
A) cost-based pricing.
B) invoice pricing.
C) discount pricing.
D) sales volume pricing.

Question

Quizplus · Accepted Answer

Vandelay Industries is using cost-based pricing because the sales price is determined by adding a markup to the cost of manufacturing the product.

Vandelay Industries Manufactures a Range of Latex Products