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

question 1

Multiple Choice

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

• A) In this approach, firms regard foreign sales as bonus sales and assume that there will be no return over their variable costs.
• B) In this approach, firms are 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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Definitions:

Upward Communication

The process through which employees communicate information, feedback, or concerns upward in the organizational hierarchy to their superiors.

Dropped In Importance

Situations or items that have become less significant or prioritized over time.

Grapevine

An informal, unofficial, and personal communication network found in an organization or social community.

Useful Information

Data that is relevant, accurate, and timely, aiding in decision making by providing significant insight or knowledge.