Asked by i love chips on May 26, 2024
Verified
A company that caries hundreds or thousands of product lines that require regular price updates is likely to implement:
A) time and material pricing.
B) target costing and pricing.
C) absorption cost pricing.
D) cost-plus pricing.
Product Lines
A group of related products marketed under a single brand name by the same company.
Price Updates
Adjustments made to the selling price of goods or services in response to market dynamics, cost changes, or economic factors.
Cost-Plus Pricing
A sales tactic where the final selling price is set by adding a predetermined extra percentage to the cost of the product.
- Identify the distinctions between cost-based and value-based pricing approaches.
- Understand the significance of labor and material expenses in determining prices and analyzing profitability.
Verified Answer
JO
Julia OlexaJun 02, 2024
Final Answer :
D
Explanation :
Cost-plus pricing is most suitable for companies that carry a large number of product lines that require regular price updates. This method involves adding a markup percentage to the cost of producing the product to determine the selling price. It provides a systematic way of calculating prices that is easy to manage and adjust.
Learning Objectives
- Identify the distinctions between cost-based and value-based pricing approaches.
- Understand the significance of labor and material expenses in determining prices and analyzing profitability.