Which cost-based pricing method entails adding a fixed percentage to the cost of all items in a specific product class?
A)experience curve pricing
B)cost-plus and fixed-fee pricing
C)demand backward pricing
D)standard markup pricing

Question

Quizplus · Accepted Answer

Standard markup pricing involves adding a fixed percentage to the cost of all items in a specific product class. This method is commonly used in retail industries where the markup is used to cover operating costs and generate a desired profit margin. Choice A, experience curve pricing, is based on the concept that as production volumes increase, the cost of production decreases due to increased efficiency. Choice B, cost-plus and fixed-fee pricing, involves adding a fixed amount or percentage to the cost of a product to arrive at a price. Choice C, demand backward pricing, is a type of pricing strategy that starts with the price that the consumer is willing to pay for a product and works backward to determine the cost that can be incurred to generate a profit at that price.

Which Cost-Based Pricing Method Entails Adding a Fixed Percentage to the Cost