A person selling wooden racks for cooling cakes and bread knows that it costs $15.00 to make one rack.If the person who crafted the rack priced each rack so that he earns a 25 percent profit from the money he spent to make one rack,he is using which approach to pricing?

Question

Quizplus · Accepted Answer

Cost-plus pricing involves adding a percentage markup on top of the cost of producing the item in order to determine the selling price. In this case, the craftsperson is adding a 25% markup to the $15.00 cost of making the rack, making the selling price $18.75.

A Person Selling Wooden Racks for Cooling Cakes and Bread