What Cost Concept Used in Applying the Cost-Plus Approach to Product

question 101

Multiple Choice

What cost concept used in applying the cost-plus approach to product pricing includes total manufacturing costs and total selling and administrative expenses in the "cost" amount to which the markup is added?

• A) Variable cost concept
• B) Total cost concept
• C) Product cost concept
• D) Opportunity cost concept

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Definitions:

Quota

A quota is a government-imposed trade restriction that limits the number or monetary value of goods that can be imported or exported during a particular time frame.

Tariff

A tax imposed by a government on goods and services imported from other countries, intended to increase their price and make domestic products more competitive.

Most-Favored-Nation Status

A trade status granting a nation the best trading terms available to any other nation, such as lowest tariffs or highest import quotas.

Negotiated Tariff Rates

Tariff rates determined through bargaining between countries, rather than set unilaterally, often resulting in lower duties.