When Using the Product Cost Concept of Applying the Cost-Plus

question 100

Multiple Choice

When using the product cost concept of applying the cost-plus approach to product pricing, what is included in the markup?

• A) desired profit
• B) total fixed manufacturing costs, total fixed selling and administrative expenses, and desired profit
• C) total costs plus desired profit
• D) total selling and administrative expenses plus desired profit

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Definitions:

Incorporated

The process of legally declaring a corporate entity as separate from its owners, providing legal protections and allowing for the raising of capital.

De Facto Corporation

A corporation that operates in all respects as a corporation despite not having completed the formalities required for legal recognition.

Ultra Vires

Actions or activities conducted by a corporation or its officers that lie beyond the powers granted by its charter or the laws.

Ultra Vires Contract

A contract that exceeds the powers granted to a corporation by its charter or bylaws.