Cost-Plus Pricing Is a Reasonable Way to Determine the Optimal

question 141

Multiple Choice

Cost-plus pricing is a reasonable way to determine the optimal price when

• A)marginal cost and average cost are roughly equal.
• B)fixed cost and variable costs are roughly equal.
• C)fixed costs vary.
• D)fixed costs are high.

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Definitions:

Gross Working Capital

The total of all current assets of a company, indicating the liquid resources available for day-to-day operations.

Accounts Payable

Liabilities of a business that represent its obligations to pay off a short-term debt to its creditors or suppliers.

Fixed Assets

Long-term tangible assets that are used in the operations of a business and are not expected to be converted to cash in the short term.

Pledged Receivables

Assets owed to a company that have been used as collateral for a loan or other financial agreement.