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

question 132

Multiple Choice

When using the variable cost method of applying the cost-plus approach to product pricing, which of the following 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:

Rank Ordering

A process of arranging items in a sequence based on their importance, priority, or quality.

Management Development

Is training to improve knowledge and skills in the management process.

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The process of selecting a course of action among multiple alternatives.

Corporate Strategy

The overarching plan that defines the long-term objectives and direction of a corporation, determining how to allocate resources to meet its goals.