Setting the Price of a Product or Service by Adding

question 249

Multiple Choice

Setting the price of a product or service by adding a fixed percentage to the total unit cost is referred to as

• A) cost-plus-fixed-percentage fee pricing.
• B) target pricing.
• C) cost-plus-percentage-of-cost pricing.
• D) experience-curve percentage pricing.
• E) target return on investment pricing.

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Definitions:

Income Tax Payable

The amount of income tax that a company or individual owes to the government but has not yet paid.

Income Tax Expense

The cost incurred by businesses and individuals due to earnings taxed by federal, state, and local governments.

Short-Term Note Payable

A debt obligation that is due within one year or less, typically used for working capital needs or to finance short-term liquidity requirements.

Specified Amount

This term refers to a particular or agreed-upon sum of money in various financial contexts.