Under the cost-plus approach to pricing products, all of the following are prospective cost bases EXCEPT:
A)full product cost
B)target cost
C)variable manufacturing cost
D)variable product cost

Question

Quizplus · Accepted Answer

The cost-plus approach typically uses actual or estimated costs as the cost base and then adds a markup to determine the selling price. The prospective cost bases are usually the full product cost, variable manufacturing cost, and variable product cost. Target cost, however, is not a prospective cost base, as it represents the desired cost level for a product rather than the actual or estimated cost.

Under the Cost-Plus Approach to Pricing Products, All of the Following