Question

In _____, the seller pays all or part of the actual shipment charges and does not pass them on to the buyer.

a. basing-point pricing
b. freight absorption pricing
c. fob origin pricing
d. uniform delivered pricing

Answer 1

b. freight absorption pricing

Step-by-step explanation:

This is a pricing arrangement where the manufacturer/seller bears the cost of shipping and freight while the buyer only pay for the quoted cost of the goods.

Its a pricing strategy used by firms to attract more customers and encourage sales. Although in some cases, the freight cost have already been included in the cost of the goods.