Assume it costs Lady Marion Seafood,Inc.$30 to catch,process,freeze,package,and ship 5-pound packages of Alaskan salmon.It uses a 60 percent markup on its salmon products and charges customers $48 for a postage-paid vacuum-sealed package.What type of pricing does Lady Marion Seafood use?
A)target return-on-sales pricing
B)cost-plus-fixed-fee pricing
C)standard markup pricing
D)target profit pricing

Question

Quizplus · Accepted Answer

Lady Marion Seafood uses standard markup pricing, which involves adding a set percentage markup to the cost of the product to determine the selling price. In this case, the 60% markup on the $30 cost produces a selling price of $48 per package. Target return-on-sales pricing and target profit pricing involve setting a specific profit goal and pricing accordingly, while cost-plus-fixed-fee pricing involves adding a fixed fee on top of the cost of the product. None of these pricing methods seem to apply to the given scenario.

Assume It Costs Lady Marion Seafood,Inc