Which of the following statements is true regarding cost-plus pricing?
◦ It starts with a target price which is the estimated price for a product.
◦ A company uses a markup percentage that estimates a product price that covers full product costs and earns the required return on investment.
◦ It first determines product characteristics and target price on the basis of customer preferences and then computes a target cost.
◦ The cost-plus price chosen has already been studied for customer reaction to the price.