ENTREPRENEURSHIP

Detailed explanation-1: -What is cost-plus pricing? Cost-plus 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).

Detailed explanation-2: -Cost-plus pricing, also called markup pricing, is the practice by a company of determining the cost of the product to the company and then adding a percentage on top of that price to determine the selling price to the customer.

Detailed explanation-3: -This appears in two forms: the first, full cost pricing, takes into consideration both variable and fixed costs and adds a % markup. The other is direct cost pricing, which is variable costs plus a % markup. The latter is only used in periods of high competition as this method usually leads to a loss in the long run.