Cost Based Pricing Multiple Choice Questions (MCQ) PDF Download

MCQ 1: The pricing method used by services companies, such as home repair services, architectural firms and automobile repair services is known as

1. product life cycle method
2. life cycle budgeting method
3. life cycle costing method
4. time and material method

MCQ 2: If total production is 25000 units and target annual operating income is $300000, then target operating income per unit would be

1. $15
2. $12
3. $16
4. $18

MCQ 3: The target annual operating income is divided with invested capital to calculate

1. target rate of return on investment
2. operating income per unit
3. operating cost per unit
4. cost of goods sold

MCQ 4: If the cost base is $350 and the markup component is 11% then prospective selling price will be

1. 388.5
2. 350
3. 362
4. 368.5

MCQ 5: The product costing technique in which markup component is added into cost base, to set a target price is known as

1. market based approach
2. cost incurrence pricing
3. cost plus pricing
4. locked-in cost pricing