The basic formula for _____ is Price = Direct costs + Overhead + Profit margin.
A) Contribution margin
B) Return on investment
C) Cost-based pricing
D) ABC costing
E) Net profit

Question

Quizplus · Accepted Answer

The given formula is for cost-based pricing. It takes into account the direct costs, overheads, and the profit margin to arrive at the final price of the product or service.

The Basic Formula for _____ Is Price = Direct Costs