GK
BUSINESS ECONOMICS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Cost plus
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Seasonal
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Promotional
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None of these
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Detailed explanation-1: -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). The resulting number is the selling price of the product.
Detailed explanation-2: -The cost-plus method is a commonly used method to determine transfer pricing for inter-company transactions. With the cost-plus method, the first step is to determine the total cost incurred in production or service delivery for the product or service in question.
Detailed explanation-3: -When the selling price includes a specific profit margin added to the cost price of each product, in order to secure that profit is earned on each unit sold, it is known as cost-plus pricing.