Cost-plus pricing is often used by companies that produce custom products where market prices are not easily available.

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Cost-plus pricing involves adding a markup on top of the cost of producing a product to determine the selling price. This approach is typically used by companies that produce custom products or provide services where market prices are not readily available. By incorporating all the costs incurred to produce a product or service, including material, labor, overhead, and profit margin, companies can ensure they cover their expenses and generate a reasonable profit margin.

Cost-Plus Pricing Is Often Used by Companies That Produce Custom