A pricing method where a supplier is reimbursed for all costs, regardless of what they may be, and who also receives an agreed upon dollar amount of profit that is independent of the final cost of the project, is referred to as
A)target return on investment pricing.
B)cost-plus-percentage-of-cost pricing.
C)target return on sales pricing.
D)experience curve pricing.
E)cost-plus-fixed-fee pricing.

Question

Quizplus · Accepted Answer

The pricing method described is cost-plus-fixed-fee pricing, where the supplier is reimbursed for all costs and receives a fixed fee or profit regardless of the final cost of the project. This method provides a level of certainty for the supplier's profitability, but may not be preferred by the buyer as they have less control over the final cost.

A Pricing Method Where a Supplier Is Reimbursed for All