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Cost Plus Pricing More Practical But Less Profitable
Length: 1 pages (345 Words)
Cost-Plus Pricing-More Practical But Less Profitable
Cost-plus pricing is one of the strategies that businesses use to determine the price of their products. The strategy is also called the mark-up pricing. The strategy sets the prices of products/services as the cost of production plus a given percentage of profit margins. In most cases, the firm determines the amount of profit it wants from the sale of a product. The use of markup pricing helps a firm to estimate the amount of returns that it is likely to make. The strategy is considered as the most practical approach of maximizing profits, since it is easy to compute and does not need a lot of information.
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