Question

If a company is trying to implement cost-plus pricing, it must know the total cost before pricing its product. The problem with using the actual total cost is that it:

A. may not be know until after the products are priced and sold
B. can result in prices that are too high
C. can result in prices that are too low
D. may cause sales to decline as a result of seasonal price functions.

Answer 1

The problem with using the actual total cost in implementing cost-plus pricing is that it may not be know until after the products are priced and sold.

Step-by-step explanation:

The problem with using the actual total cost in implementing cost-plus pricing is that it may not be know until after the products are priced and sold. Cost-plus pricing is a pricing strategy where a company adds a markup to its total cost in order to determine the selling price. However, the actual total cost may not be known accurately until after the products are priced and sold, leading to potential inconsistencies in pricing decisions.