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CBF Co uses cost-plus pricing.
Which of the following statements regarding cost-plus pricing
strategies are correct?
(1) Marginal cost-plus pricing is easier where there is a readily
identifiable variable cost.
(2) Full cost-plus pricing requires the budgeted level of output to be
determined at the outset.
(3) Cost-plus pricing is a strategically focused approach as it
accounts for external factors.
(4) Cost-plus pricing requires that the profit mark-up applied by an
organisation is fixed.
A)1 and 2
B)2,3 and 4
C)1,3 and 4
D)1,2,3,4
the above question has been taken from the kaplan study text.And the correct answer according to kaplan is B but i think here a mistake is made because 3 is definitely not correct because its the target costing which accounts for external factor not the cost plus pricing and costing.
What do you think?I agree – assuming you have copied the wording correctly, then 3 is definitely not correct.
@johnmoffat said:
I agree – assuming you have copied the wording correctly, then 3 is definitely not correct.I exactly copied pasted it.
And none of the options from A to B makes sense .
Apparently it looks like options 1 and 4 are correct .Am i right?
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