If a Business Knows How Many Units Will Be Sold

question 1

Multiple Choice

If a business knows how many units will be sold and what the fixed costs and the variable costs will be,____ allows the selling price to be set to produce a given rate of return.

• A) Cost-plus pricing
• B) Target-return pricing
• C) Penetration pricing
• D) Reference pricing

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Definitions:

Debit Total

The sum of all debit entries made in an account or ledger over a specific period.

Credit Total

The sum of all credit transactions in an accounting period, representing the amount owed by a business to its creditors.

Income Statement

A financial statement that reports a company's financial performance over a specific accounting period, detailing revenues, expenses, and profits.

Current Ratio

A financial metric used to evaluate a company's ability to pay off its short-term liabilities with its short-term assets.