A Drawback of Cost-Plus Pricing Is That It Is a Relatively

question 116

True/False

A drawback of cost-plus pricing is that it is a relatively difficult approach to pricing.

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Definitions:

Full Cost

The sum of all costs incurred in the production of a product or service.

Fixed Overhead

This refers to the consistent, non-variable costs incurred by a business, regardless of its level of production or sales volumes.

Variable Overhead

Costs that vary with the level of production output, such as utilities for machines and indirect materials.

Direct Labor Hours

The total hours worked by employees directly involved in the production of goods or services.