What pricing method is used because it establishes a benchmark to show how much of a firm's effort is needed to achieve a certain profit?

Question

Quizplus · Accepted Answer

A shortcoming with target profit pricing is that although it is simple and the target involves only a specific dollar volume,there is no benchmark of sales or investment used to show how much of the firm's effort is needed to achieve the target.Firms such as supermarket chains often use target return-on-sales pricing to set typical prices that will give them a profit that is a specified percentage.

What Pricing Method Is Used Because It Establishes a Benchmark