Target profit pricing is:
A)setting a price based on a specific annual dollar target volume of profit.
B)setting the price of a line of products at a number of different price points.
C)adding a fixed percentage to the cost of all items in a specific product class.
D)setting prices to achieve a profit that is a specified percentage of the sales volume.

Question

Quizplus · Accepted Answer

Target profit pricing involves setting a price that will result in a specific annual dollar target volume of profit. This approach involves calculating the total costs associated with producing and selling a product, determining the desired level of profit, and then using this information to set the price. By setting a specific profit target, a company can ensure that its pricing strategy aligns with its overall financial objectives.

Target Profit Pricing Is