Author Question: Which of the following is an advantage of using full cost of the product as the cost base? (Read 102 times)

rayancarla1 · **on:** Mar 6, 2021

Question 1

Which of the following can be used to determine markup percentage in the case of cost-plus pricing?
◦ Target annual operating income / Invested capital
◦ Estimated annual dividend / Invested capital
◦ Target sales revenue / Target annual operating income
◦ Estimated annual dividend / Target annual operating income

Question 2

Which of the following is an advantage of using full cost of the product as the cost base?
◦ Managers are informed regarding the minimum long-run cost they need to recover to stay in business.
◦ Using the full cost of the product as a basis for pricing increases the temptation to cut prices below full costs.
◦ Fixed cost allocations can be arbitrary while using full cost of the product as the cost base.
◦ It requires a detailed analysis of cost behavior for computations and hence promotes a better understanding of the cost behavior.

manuelcastillo · **Reply #1 on:** Mar 6, 2021

A FREE account is required to view all solutions!

Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.

Answer Preview

Only 39% of students answer this correctly