Q13-10 (book/static) What is cost-plus pricing? O A. Cost-plus pricing is a pric

Question

Q13-10 (book/static) What is cost-plus pricing? O A. Cost-plus pricing is a pricing approach in which managers add a markup to cost in order to determine price O B. Cost-plus pricing starts with an estimated price for a product or service that potential customers are willing to pay O C. Cost-plus pricing does not trade-off cost, markup, and customer reactions O D. Cost-plus pricing first determines product characteristics and target cost on the basis of customer preferences and expected competitor responses, and then computes price.

Explanation / Answer

Ans 13 -10) Point A is the answer i.e. Cost Plus Pricing is a pricing approach in which managers add a markup to cost inorder to determine price.

Ans 13-13) a)Point C is the answer i.e. An estimate of the revenue and costs attributable to each product from its initial R&D to its final customer, servicing and support.

b)Answer to "which of the following is an approach to long-run pricing decisions?" Point D is the answer i.e. both B and C are correct.

c) Answer to " What is a target cost per unit?" Point A is the answer i.e. The estimated long run cost per unit of a product(or service) that when sold at the target price, enables the company to achieve the targeted operating income per unit.

Ans 13.2-17a) Point C is the answer i.e. $19,950.

Ans 13.4-13) Point D is the answer i.e. cost that has not yet been incurred, but based on decisions that have already been made, will be incurred in the future.

Ans 13.1-5) Point D is the answer i.e. Value customers place on product.

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