In a Cost-Plus Approach to Pricing

question 73

Multiple Choice

In a cost-plus approach to pricing:

• A) there is an inverse relationship between the magnitude of the cost basis and the markup percentage.
• B) there is a direct relationship between the magnitude of the cost basis and the markup percentage.
• C) the cost basis used must include fixed manufacturing overhead.
• D) "plus" refers to the addition of allocated administrative overhead to the direct manufacturing costs.
• E) "plus" refers to the addition of allocated fixed manufacturing overhead to the variable manufacturing costs.

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Definitions:

Cognitive Explanation

An approach that seeks to understand human behavior by exploring internal mental processes such as perception, memory, thought, and problem-solving.

Reinforcement Theory

A principle of behavior that emphasizes the role of reinforcement in conditioning behavior.

Motivation Theories

Frameworks and concepts that seek to understand what drives individuals to initiate, direct, and sustain behaviors and actions to achieve personal or organizational goals.

Written Reprimand

A formal written notice to an employee indicating a violation of policies or standards and typically documenting disciplinary action.