Question

First step of cost-based pricing strategy is to ______.

• A. Design a product
• B. Determine cost of product
• C. Set price based on cost
• D. Convince buyer about products value

Answer 1

The correct option is A Design a product

Cost-based pricing refers to a pricing method in which some percentage of desired profit margins is added to the cost of the product to obtain the final price. In other words, cost-based pricing can be defined as a pricing method in which a certain percentage of the total cost of production is added to the cost of the product to determine its selling price. Cost-based pricing can be of two types, namely, cost-plus pricing and markup pricing.