In order for a company to be successful,its pricing must cover its fixed costs and its variable costs.

Question

Quizplus · Accepted Answer

Pricing should cover both fixed and variable costs in order for a company to break even and make a profit. Fixed costs include expenses like rent, utilities, and salaries, which do not fluctuate with sales volume, while variable costs include expenses like materials and labor, which increase or decrease with sales volume. By pricing products or services to cover both fixed and variable costs, a company can achieve profitability.

In Order for a Company to Be Successful,its Pricing Must