Which of the Following Is an Advantage of Using Cost-Based

question 140

Multiple Choice

Which of the following is an advantage of using cost-based pricing methods?

• A) They consider external factors such as competition.
• B) They include consideration of the effects of demand.
• C) They are relatively simple to calculate.
• D) They simplify the process of accurately estimating cost.
• E) They take the product life cycle into consideration.

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Definitions:

Land

Land refers to the surface of the earth and any permanent fixtures attached to it, considered a fixed asset in accounting and not subject to depreciation.

Machinery and Equipment

Fixed assets used in the operations of a business that are expected to be used for multiple years.

Ordinary Maintenance

Routine maintenance and repairs necessary to keep property (equipment, buildings, etc.) in efficient operating condition.

Asset Improvements

Expenditures made to increase the utility or extend the useful life of an asset.