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

question 28

Multiple Choice

What cost concept used in applying the cost-plus approach to product pricing includes only total manufacturing costs 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:

Competitive Pressure

The influence and constraints exerted by competition within a market, which force companies to continuously improve.

Indirect Pay

Employee compensation that includes non-monetary benefits such as health insurance, retirement plans, and paid time off, rather than direct cash payments.

Hour Worked

A measurement of labor contributing to the production of goods and services, calculated as the amount of time an employee spends on work activities.

Wage

The fixed regular payment, typically paid on a daily or weekly basis, earned by an employee.