Which Cost-Based Pricing Method Holds That a Product's Unit Costs

question 295

Multiple Choice

Which cost-based pricing method holds that a product's unit costs predictably decline by 10 to 30 percent each time the firm's production volume doubles?

• A)experience curve pricing
• B)cost-plus-percentage-of-cost pricing
• C)cost-plus-fixed-fee pricing
• D)standard markup pricing

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Definitions:

Gross Profit

The profit a company makes after deducting the costs associated with making and selling its products or the costs associated with providing its services.

FIFO

"First-In, First-Out," an inventory valuation method where the cost of goods sold is based on the oldest inventory items.

Lower Of Cost

Lower of Cost or Market (LCM) is an accounting principle that values inventory at the lower of its historical cost or current market value.

Inventory Value

The total cost or market value of all the goods and materials held by a company for the purpose of resale or production.