Summing the Total Unit Cost of Providing a Product or Service

question 115

Multiple Choice

Summing the total unit cost of providing a product or service and adding a specific amount to the cost to arrive at a price is referred to as

• A) standard markup pricing.
• B) experience-curve pricing.
• C) cost-plus pricing.
• D) product-line pricing.
• E) target return-on-investment pricing.

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Definitions:

Trade Receivables

Amounts owed to a business by its customers arising from the sale of goods or services on credit.

Other Receivables

Financial claims against other entities besides accounts receivable, such as interest receivable, income taxes refundable, or insurance claims receivable.

Nontrade Receivables

Monies owed to a company that are not related to the sale of goods or services, such as loans to employees.

Loans

Loans refer to borrowed money that must be repaid with interest by the borrower to the lender, used typically for personal, business, or education purposes.