What Cost Concept Used in Applying the Cost-Plus Approach to Product

question 101

Multiple Choice

What cost concept used in applying the cost-plus approach to product pricing covers selling expenses, administrative expenses, and desired profit in the markup?

• A) total cost concept
• B) product cost concept
• C) variable cost concept
• D) sunk cost concept

---

Definitions:

Net Investment Income

The profit or loss derived from investments such as stocks, bonds, mutual funds, and other investment properties, after related expenses are subtracted.

Deduction

An expense that can be subtracted from an individual's gross income to reduce the amount of income subject to tax.

Non-Cash Gifts

Items of value, other than money, given by one party to another, which can include property, stocks, or goods, and may be subject to tax regulations.

Fair Market Value

The price that an asset would sell for on the open market between willing and informed buyers and sellers.