The marginal cost method of pricing considers the direct costs of producing and selling products for export as the floor beneath which prices cannot be set.What costs need to be excluded in these direct costs?
A) Variable costs and product costs
B) Shipment costs and manufacturing costs
C) Fixed costs, R&D, and domestic overhead
D) Inventory costs and production costs

Question

Quizplus · Accepted Answer

The marginal cost method only considers the direct costs of production and excludes fixed costs, research and development costs, and domestic overhead. These costs are not directly related to the production and selling of products for export and thus should not be factored into the pricing calculation.

The Marginal Cost Method of Pricing Considers the Direct Costs