Knowee
Questions
Features
Study Tools

Multiple Choice QuestionA price-setter company will use more:Multiple choice question.target pricing methodscost-plus pricing methodstarget costing methods

Question

Multiple Choice Question

A price-setter company will use more:

  • target pricing methods
  • cost-plus pricing methods
  • target costing methods
🧐 Not the exact question you are looking for?Go ask a question

Solution

A price-setter company will use more cost-plus pricing methods.

Here's why:

  1. Understanding the terms: A price-setter company is one that has the ability to set its own prices because it has a unique product or service, or has a monopoly in the market. Cost-plus pricing is a method where the selling price is determined by adding a specific amount markup to a product's unit cost.

  2. Price-setter and cost-plus pricing: Since a price-setter company has the ability to set its own prices, it can afford to use the cost-plus pricing method. This method ensures that all costs are covered and a profit margin is added on top.

  3. Comparison with other methods: Target pricing methods involve setting a price to meet a certain target, such as a specific profit margin or return on investment. This might not be suitable for a price-setter company as it might limit their pricing flexibility. Target costing methods involve designing a product so it can be produced at a cost that will meet a profit target. This might not be necessary for a price-setter company as they can set a higher price to cover their costs.

So, a price-setter company will use more cost-plus pricing methods as it allows them to cover their costs and set a price that ensures a profit.

This problem has been solved

Similar Questions

Multiple Choice QuestionCosts developed which identify what products should cost are calledMultiple choice question.standard costs.product costs.actual costs.

Of the two basic approaches to setting prices, Blank______ is the most common.Multiple choice question.cost-orienteddemand-oriented

Cost classification can be done in .a.two ways.b.three ways.c.several ways.d.four ways.

Question 461 ptsCosts that vary depending on the number of units produced or sold are referred to as fixed costs.Group of answer choicesfalsetrue PreviousNext

Multiple Choice QuestionTotal revenue less (that is, minus) total cost is known asMultiple choice question.elasticity.income.demand.profit.

1/3

Upgrade your grade with Knowee

Get personalized homework help. Review tough concepts in more detail, or go deeper into your topic by exploring other relevant questions.