Which of the Following Is Not an Advantage of Cost-Plus

question 134

Multiple Choice

Which of the following is not an advantage of cost-plus pricing?

• A)It is easy to calculate.
• B)It requires little information.
• C)If a firm is selling multiple products, it ensures that the firm's prices will cover costs that are difficult to assign to one product.
• D)It ensures that the firm will maximize its profits.

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Definitions:

Accounting Equation

The fundamental equation of double-entry bookkeeping: Assets = Liabilities + Equity.

Cash

Cash refers to the company's currency and coins on hand, including bank account balances, utilized for transactions and operational needs.

Revenue

The total financial proceeds accumulated from a company's chief business endeavors, including sales of services and goods integral to its operations.

Equity

The ownership interest of shareholders in a corporation, represented by the assets minus the liabilities.