A Method for Setting Prices That Determines the Total Cost

question 83

Multiple Choice

A method for setting prices that determines the total cost of owning the product over its useful life is called the:

• A)improvement value method.
• B)supply-based method.
• C)demand-based method.
• D)premium pricing method.
• E)cost of ownership method.

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Definitions:

Current Assets

Liquid assets that a company owns and expects to use or convert into cash within a year or its operational cycle.

Cash

A company's currency or assets that can be immediately used for transactions or payments.

Supplies

Items that are used in the day-to-day operations of a business, often categorized as a current asset on the balance sheet.

Income Summary

The income summary account is used in accounting to transfer revenue and expense account balances to determine the net income or loss for a given period before closing them to the retained earnings account.