In Using the Total Cost Concept of Applying the Cost-Plus

question 56

Multiple Choice

In using the total cost concept of applying the cost-plus approach to product pricing, what is included in the cost amount to which the markup is added?

• A) Total selling and administrative expenses plus desired profit
• B) Total fixed manufacturing costs, total fixed selling and administrative expenses, and desired profit
• C) Total costs of manufacturing a product plus selling and administrative expenses
• D) Total variable manufacturing costs, total variable selling and administrative expenses, and desired profit

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Definitions:

Indicator Variable

A variable that takes on the value of 0 or 1 to indicate the absence or presence of some categorical effect or attribute.

Multiple Regression

A statistical analysis tool that assesses the effect of multiple independent variables on a particular dependent variable.

Stepwise Regression

A technique in regression modeling that involves automatically selecting which variables predict the outcome.

Nonparametric Tests

Statistical tests that do not assume a specific distribution shape for the population from which the samples are drawn.