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31 October, 00:15

Identify a true statement about cost-based pricing. a. An appropriate markup percentage is always required in cost-based pricing. b. Cost-based pricing requires an approximate estimate of the cost for pricing a product. c. Cost-based pricing is used only by manufacturing and trading companies. d. The markup percentage used in cost-based pricing includes only the desired profit.

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  1. 31 October, 00:30
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    a. An appropriate markup percentage is always required in cost-based pricing.

    Explanation:

    Under cost based pricing, the proper cost of manufacturing each product is identified and then the expected profit is added to get the selling price.

    Basically it is a strategy to control cost prices and not adjusting and earning the desired profit.

    As for example, if the net estimated cost of a product = $100

    And the manufacturer wants to earn a profit of $20 then, he will add this profit margin as 20% on cost to get the selling price.

    = $100 + 20% = $120
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