Managers Base Prices on Product Costs Due to Many Reasons

question 34

Multiple Choice

Managers base prices on product costs due to many reasons. Which of the following is not one of the reasons?

• A) Most companies sell many products and services and cost-based pricing provides a simple and direct approach.
• B) Cost-based pricing provides a good starting point for managers.
• C) The cost of a product or service provides a lower limit or floor, below which the price cannot be set in the long run.
• D) Cost-based pricing is useful for standard cost analysis.

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