Which of the Following Is True of the Full-Cost Pricing

question 58

Multiple Choice

Which of the following is true of the full-cost pricing approach?

• A) In this approach, any contribution to fixed cost after variable costs are covered is profit to the company.
• B) In this approach, the firm is concerned only with the marginal or incremental cost of producing goods to be sold in overseas markets.
• C) In this approach, prices are often set on a cost-plus basis, that is, total costs plus a profit margin.
• D) This approach is a practical approach to pricing when a company has high fixed costs and unused production capacity.
• E) This approach insists that each unit of a similar product is treated differently in terms of cost.

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