Practicing Success
Practicing Success
CUET Preparation Today
| Which of the following is NOT an advantage of cost plus pricing? |
It is the simplest method to decide the price for a product because one has just to add up all the cost and then add profit which you want to earn which will give the price for a product.
It creates cost control and cost reduction pressures from the start, leading to greater efficiency. Since the company is using its own data for deciding cost which makes it easier for a company to evaluate the reasons for escalations in expenses and therefore it can take corrective action immediately.
Another advantage of this is that company knows exactly the amount of expenditure that has incurred on making a product and therefore they can add profit margin accordingly which helps in achieving the desired revenue for a firm.
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| It creates cost control and cost reduction pressures from the start, leading to greater efficiency. |
| Option 2 is an advantage of penetrate pricing. |
