The Markup Percentage Is Usually Higher If the Cost Base

question 71

Multiple Choice

The markup percentage is usually higher if the cost base used is:

• A)the full cost of the product
• B)the variable cost of the product
• C)variable manufacturing costs
• D)total manufacturing costs

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Definitions:

Annual Output

The total production or quantity of goods and services produced by a company or economy in one year.

Economies of Scale

The cost advantage achieved by an increase in production, leading to a decrease in the average cost per unit through efficient allocation of resources and spreading of fixed costs.

Cost-output Elasticity

The ratio of the percentage change in cost relative to the percentage change in output, indicating how costs change with output levels.

Marginal Cost

The cost associated with producing one additional unit of a product.