Cost-oriented selling price per unit is obtained by adding a firm's desired profit per unit to the average total cost.

Question

Quizplus · Accepted Answer

Refer to Exhibit 18-7.Cost-oriented pricing requires an estimate of the total number of units to be sold.That estimate determines the average fixed cost per unit and thus the average total cost.The firm then adds the desired profit per unit to the average total cost to get the cost-oriented selling price.

Cost-Oriented Selling Price Per Unit Is Obtained by Adding a Firm's