Cost Based Pricing Multiple Choice Questions with Answers – 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