The Method of Setting Prices in Which Marketers Total All

question 41

Multiple Choice

The method of setting prices in which marketers total all the costs for the product and then add an amount to arrive at the selling price is called ________.

• A) supply-based pricing
• B) target costing
• C) cost-plus pricing
• D) yield management pricing
• E) demand-based pricing

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Definitions:

Retail Inventory Method

An accounting technique used by retailers to estimate inventory levels based on the cost to retail price ratio.

Net Markups

Net Markups refer to the increase in the selling price of goods beyond their purchase price, net of any discounts or allowances.

Cost-to-Retail Ratio

A method used in retail to convert the cost of goods available for sale into the retail price.

FIFO Cost

A cost flow assumption for inventory valuation where the first items purchased are the first ones to be used or sold.