A product costs $600 to manufacture and $20 to market and $10 to distribute (ship to customers.) R&D costs are allocated at $40 per unit. Based on a targeted rate of return, manager uses a mark-up of 30%. What is the prospective selling price based on a Cost-Plus pricing approach?
A) $780
B) $806
C) $819
D) $871

Question

Quizplus · Accepted Answer

The cost base is the full cost. The full cost is $670 x 1.3 = $871

A Product Costs $600 to Manufacture and $20 to Market