Jian has entered into a contract with the federal government to design a computer simulation for training helicopter pilots. The contract calls for the final price to be set at a fixed percentage profit over and above her cost of production. This represents:A) target costingB) supply and demand pricingC) demand-based pricingD) cost-based pricing

Question

Essence Gibbs

Business

20 December, 04:55

Jian has entered into a contract with the federal government to design a computer simulation for training helicopter pilots. The contract calls for the final price to be set at a fixed percentage profit over and above her cost of production. This represents:A) target costingB) supply and demand pricingC) demand-based pricingD) cost-based pricing

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Answers (1)

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Reid Black · Answer 1

Answer:D. Cost - based pricing

Explanation:

This is when a fixed percentage is added to the cost of goods sold in determining the sales price. This guaranteed the cost are not only covered, but profits are also guaranteed on the transaction.