When Using the Variable Cost Concept of Applying the Cost-Plus

question 30

Multiple Choice

When using the variable cost concept of applying the cost-plus approach to product pricing, what is included in the markup?

• A) total costs plus desired profit
• B) desired profit
• C) total selling and administrative expenses plus desired profit
• D) total fixed manufacturing costs, total fixed selling and administrative expenses, and desired profit

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Definitions:

Blue Price

This term does not have a widely recognized definition and could refer to specific market jargon or a particular pricing strategy.

Ambrosia

In Greek mythology, ambrosia is considered the food or drink of the gods, often depicted as conferring longevity or immortality upon whoever consumed it.

Fixed Coefficients

A term used in production and economics to describe technologies where inputs are used in strict fixed proportions to produce an output.

Production Possibility Set

A graph or curve depicting all maximum output possibilities for two or more goods, given a set of inputs.