Which of the Following Is an Advantage of Using Cost-Based

question 88

Multiple Choice

Which of the following is an advantage of using cost-based pricing methods?

• A) They consider external factors such as competition.
• B) They include consideration of the effects of demand.
• C) They are relatively simple to calculate.
• D) They make accurate cost estimating a simple process.
• E) They take the product life cycle into consideration.

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Definitions:

Units

Individual instances or elements, often used to quantify or measure.

Units of Production

A method of depreciation that allocates the cost of an asset over its useful life based on the number of units it produces or its operational hours.

Budgeted Units

The quantity of product or services that a company plans to produce or sell in a specific period, detailed in its budget.

Inventory

The total amount of goods and materials held by a business for the purpose of resale or production, including raw materials, work-in-progress, and finished goods.