Consider the following statements regarding cost-plus pricing formulas.i.Full cost pricing formulas have the advantage of keeping the manager's attention focused on covering total costs
ii.With cost-plus pricing formulas,management must consider market conditions and likely actions of competitors.
iii.Variable cost-plus formulas have the advantage of not obscuring important information about cost behaviour.Which of the above statements is/are true?

Question

Quizplus · Accepted Answer

Statement i is true because full cost pricing ensures that all costs are covered. Statement ii is true as cost-plus pricing requires consideration of market and competition. Statement iii is true because variable cost-plus pricing highlights cost behavior.

Consider the Following Statements Regarding Cost-Plus Pricing Formulas