Question

The Fashion Store, a new startup, sets product prices so that revenues will equal manufacturing and marketing costs. The pricing strategy used by the company is referred to as ________ pricing.

Answer 1

Answer: Target return

Step-by-step explanation:

The target return pricing is one of the type of pricing method in which the various types of organization are determining the actual price based on the investment of the target return.

This type of method is one of the easiest pricing method for understanding and also calculating the pricing cost. The formula of the target return pricing are as follows:

Target return Price = Unit costing + (The desirable return x investing capital) / Total unit sales

According to the given question, the fashion store is one of the setup based company tat basically setting the prices of the products in the firm based on the revenue and this company is using the target return pricing strategy.

Therefore, Target return pricing is the correct answer.