Which of the Following Statements Is True Regarding Cost-Plus Pricing

Multiple Choice

Which of the following statements is true regarding cost-plus pricing?

A) It starts with a target price which is the estimated price for a product.
B) A company uses a markup percentage that estimates a product price that covers full product costs and earns the required return on investment.
C) It first determines product characteristics and target price on the basis of customer preferences and then computes a target cost.
D) The cost-plus price chosen has already been studied for customer reaction to the price.