In Cost-Plus Pricing, the Markup Consists of

question 22

Multiple Choice

In cost-plus pricing, the markup consists of

• A) manufacturing costs.
• B) desired ROI.
• C) selling and administrative costs.
• D) total cost and desired ROI.

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Definitions:

Average Total Costs (ATC)

The total cost of production (fixed plus variable costs) divided by the total quantity of output produced.

Total Fixed Costs

The sum of all costs that remain constant regardless of the level of production or sales volume.

Manufacturing Firm

A business involved in the production of goods through the processing of raw materials and assembling of components into finished products.

Marginal Cost (MC)

The rise in overall expenses linked to the production of an extra unit of a product or service.