A "Cost-Plus" Pricing Approach Is

question 18

Multiple Choice

A "Cost-Plus" pricing approach is:

• A) A costing system that involves working out the cost of one unit and adding on extra for the selling price in order to make a profit
• B) A costing system that includes the basic direct costs of the product, plus all of the overheads of running the factory as a separate cost total
• C) The direct cost of producing the products sold in the month plus the cost of any unsold inventory
• D) Used in job costing - for example the cost of the raw materials plus the labour required for a building job

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Definitions:

Business Start-Ups

New ventures initiated by entrepreneurs aiming to meet a marketplace need or to offer an innovative product or service.

Business Failures

Occurrences when companies cease operations due to financial problems, lack of demand, mismanagement, or other factors, sometimes resulting in bankruptcy.

New Ideas

Innovations or concepts that have not been previously introduced or considered, often leading to technological advancements or new business models.

Competitive Price-Searcher Markets

Markets where firms have some power to set prices due to differentiated products but still face competition and must search for competitive pricing strategies.