Providing Extra Amenities to Differentiate and Support High-Priced Products Is

question 17

Multiple Choice

Providing extra amenities to differentiate and support high-priced products is referred to as ________ pricing.

• A) high-low
• B) value-added
• C) target return
• D) everyday low
• E) cost-plus

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Definitions:

Contribution Margin

The amount by which sales revenue exceeds variable costs. It represents the portion of sales that helps to cover fixed costs.

Contribution Format

A type of income statement where costs are classified as variable or fixed, and the contribution margin is computed by subtracting total variable costs from sales.

Contribution Margin

The difference between total sales revenue and total variable costs, used to cover fixed costs and generate profit.

Contribution Format

An income statement format that separates fixed and variable costs, facilitating analysis of the impact of sales volume on profit.