The product costing technique in which markup component is added into cost base, to set a target price is known as __________?
Correct answer: C. cost plus pricing
- A. market based approach
- B. cost incurrence pricing
- C. cost plus pricing
- D. locked-in cost pricing
Explanation
Under cost-plus pricing, the seller adds a markup to the product’s cost base to determine the target selling price. Market-based pricing instead starts with customer demand and competitive market conditions.
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About Cost Accounting
Cost accounting measures and analyses the cost of producing goods or providing services for planning, control and pricing decisions. It covers direct and indirect costs, fixed and variable costs, job and process costing, break-even analysis, marginal costing, overhead allocation, and the difference between product cost and period cost.
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