COST ACCOUNTING
COST VOLUME PROFIT ANALYSIS
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]


1 only


2 only


Neither 1 nor 2


Both 1 and 2

Detailed explanation1: Costplus pricing is also known as markup pricing. It’s a pricing method where a fixed percentage is added on top of the cost it takes to produce one unit of a product (unit cost). The resulting number is the selling price of the product.
Detailed explanation2: Cost Plus Pricing is also referred to as Markup Pricing. Markup pricing or costplus pricing is a pricing strategy where the price of a product or service is calculated by adding together the cost of the products and a percentage of it as markup.
Detailed explanation3: Costplus pricing is a pricing strategy by which the selling price of a product is determined by adding a specific fixed percentage (a “markup") to the product’s unit cost. Essentially, the markup percentage is a method of generating a particular desired rate of return.
Detailed explanation4: A simple formula is costplus pricing = breakeven price * profit margin goal. Breakeven price is the total cost to the firm of producing the product or service. Profit margin goal is the firm’s desired/expected profit level. Multiply the cost to provide a service by the desired profit margin.