"Cost-Plus" Pricing Means That All Costs--Manufacturing, Selling, and Administrative--Are Included

question 321

True/False

"Cost-plus" pricing means that all costs--manufacturing, selling, and administrative--are included in the cost base from which the target selling price is derived.

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Definitions:

Extraordinary Gain

A gain that arises from events or transactions that are distinct and infrequent in nature, not expected to recur regularly.

Provision For Inventories

An accounting practice where a reserve is made for potential decreases in the value of a company’s inventory.

Inventories Losses

Reductions in the amount or value of inventories due to factors such as deterioration, obsolescence, or theft, resulting in financial loss.

Lower Of Cost

An accounting principle requiring that the inventory is recorded at the lower of its cost or the current market value.