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P. 90
Chapter 8
Total cost-plus pricing
Full cost-plus pricing involves adding a mark-up to the total budgeted cost of the
product, in order to arrive at the selling price.
Quick and cheap, if cost structures are Can be the basis for uncompetitive prices
known
Useful in contracting industries Ignores the price elasticity of demand
Required profit achieved if sales budgets Problematic if budget sales volumes not
are achieved achieved
Useful to justify price increases Ignores competitors activities
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