MANAGEMENT

Detailed explanation-1: -Cost-plus 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 explanation-2: -Cost-plus pricing is a pricing method used by companies to determine the price of a product or service. It involves setting a price by adding a fixed amount or percentage to the cost of a product or service.

Detailed explanation-3: -In a nutshell, cost based pricing is a pricing strategy in which a company adds a markup to the price of a product over the cost of production and manufacturing. The strategy often involves adding a fixed percentage added on top of production costs for one unit.

Detailed explanation-4: -Cost-plus pricing isn’t for everyone. Clothing and grocery industries often use it since they sell a variety of merchandise, and each product can have a different markup percentage. For apparel brands, it’s an easy way to communicate transparency with potential customers.

Detailed explanation-5: -As the seller, you can decide to add a percentage on top of this ₹100 cost. Say, for example 50% of the total costs. The added potion of ₹50 will then be your profit. Hence, you followed a cost plus pricing strategy by arriving at a list price of ₹150 for the sandwich.