When Markup Is Based on Cost

question 45

Multiple Choice

When markup is based on cost:

• A)Cost is the portion
• B)Markup is the rate
• C)Cost is equal to selling price
• D)Cost is 100%
• E)None of these

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Definitions:

Net Operating Income

Income generated from normal business operations, excluding taxes and interest.

Relevant Costs

Costs that will be affected by a decision in the future and are pertinent to a specific business decision.

Alternative B

A second or other option in a set of choices, commonly referred to in decision-making scenarios or proposals.

Alternative A

A term that refers to one of several options or choices in a decision-making process, typically labeled as "Alternative A" for distinction.