Cost-Plus Pricing Refers to

question 134

Multiple Choice

Cost-plus pricing refers to

• A) summing the total unit cost of providing a product or service and adding a specific amount to the cost to arrive at the price.
• B) setting the price of a line of products at a number of different price points.
• C) adding a fixed percentage to the cost of all items in a specific product class.
• D) setting prices to achieve a profit that is a specified percentage of the sales volume.
• E) increasing the price slightly to protect against undue profit losses from unforeseen environmental forces.

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Definitions:

Voluntary Deductions

Amounts that employees choose to have withheld from their gross pay for various benefits or contributions, such as insurance premiums, retirement contributions, and union dues.

Accrued Vacation Benefits

The amount of vacation time that employees have earned but not yet taken, which is recorded as a liability on the company's books.

Vacation Benefits Expense

The cost to the company for the vacation time entitled to employees, reflected in financial statements.

Year-End Adjusting Entry

Entries made in the accounting records at the conclusion of an accounting period to allocate income and expenditures to the period in which they actually occurred.