Pharaoh sells custom baseball bats. He calculates prices by adding 10 percent over the cost of parts and labor to produce each bat. Pharaoh is most likely using a(n) ________ pricing strategy.
A) target costing
B) everyday low
C) competitive-based
D) cost-based
E) penetration-based

Question

Quizplus · Accepted Answer

Pharaoh is using a cost-based pricing strategy because he determines the price of his baseball bats by adding a markup (in this case, 10 percent) to the cost of parts and labor involved in producing each bat. This approach focuses on covering the costs and ensuring a profit margin above those costs.

Pharaoh Sells Custom Baseball Bats