Question

The pricing strategy that begins with the determination of a price at which a product will sell and then focuses on developing a cost structure for the product that will yield a profit is known as:

a. cost-plus pricing.
b. prestige pricing.
c. Developmental pricing
d. target costing.

Answer 1

The correct answer is letter "A": cost-plus pricing.

Step-by-step explanation:

Cost-plus pricing is a strategy to determine the price of a product based on adding the costs of production (raw materials, direct labor, and overhead) so then a percentage of the total costs will be added representing the profit of the company. The total value will be the price consumers will have to pay for the product. Cost-plus pricing is also called markup pricing.