A producer of electrical parts in Kansas City wants to expand into the West Coast market-where price competition is tough. It probably should use:

A) F.O.B. mill pricing.

B) uniform delivered pricing.

C) zone pricing.

D) freight absorption pricing.

Question

A producer of electrical parts in Kansas City wants to expand into the West Coast market-where price competition is tough. It probably should use:

A) 	F.O.B. mill pricing.

B) 	uniform delivered pricing.

C) 	zone pricing.

D) 	freight absorption pricing.

Quizplus · Accepted Answer

Freight-absorption pricing means absorbing freight cost so that a firm's delivered price meets that of the nearest competitor.

A Producer of Electrical Parts in Kansas City Wants to Expand