Which of the Following Statements Is True Regarding Cost-Plus Pricing

question 3

Multiple Choice

Which of the following statements is true regarding cost-plus pricing?

• A) It starts with a target price which is the estimated price for a product.
• B) A company uses a markup percentage that estimates a product price that covers full product costs and earns the required return on investment.
• C) It first determines product characteristics and target price on the basis of customer preferences and then computes a target cost.
• D) The cost-plus price chosen has already been studied for customer reaction to the price.

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