When Cost-Based Pricing Is Employed and Mark Up Is Based

question 24

Multiple Choice

When cost-based pricing is employed and mark up is based on manufacturing costs, the mark up must be sufficiently large enough to:

• A)cover selling expenses.
• B)cover administrative expenses.
• C)provide for the desired profit.
• D)accomplish all of the above.

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Definitions:

Commission Scale

A structure that determines how much commission an employee or agent will earn based on the level of sales or revenue generated.

Selling Price

The price at which an item or service is sold to the buyer.

Base Salary

The initial rate of compensation that an employee receives, not including any extra benefits, bonuses, or earnings that might be applicable.

Gross Salary

The total compensation received by an employee before any deductions like taxes, retirement contributions, and health insurance.