Which of the Following Is Not a Problem Associated with Cost-Based

question 36

Multiple Choice

Which of the following is not a problem associated with cost-based pricing?

• A)The procedure is illogical because a sales estimate is made before a price is set
• B)It focuses on internal costs rather than customers' willingness to pay
• C)It leads to an increase in price as sales fall
• D)It attempts to undertake break even analysis

---

Definitions:

Percentage Sales Approach

A financial planning approach that forecasts future financial statements based on the expected percentage change in sales.

Finance Perspective

An approach or viewpoint emphasizing financial metrics and outcomes in decision-making processes or analysis.

Sustainable Growth Rate

The maximum rate at which a company can grow its revenues and earnings without needing to increase financial leverage.

Assumptions

Premises or conditions accepted as true or certain without proof for the purpose of further analysis or argument.