The pricing arrangement in which markup is added into cost base to calculate the final price is known as…?

The pricing arrangement in which markup is added into cost base to calculate the final price is known as…?
A . Fixed Price approach
B. Market based approach
C. Price indices
D. Cost plus pricing

View Answer

Answer: D

Explanation:

The market approach is a method of determining the value of an asset based on the selling price of similar assets.

A fixed-price strategy means you set a price and keep it constant for an extended period of time.

Cost-plus pricing is also known as markup pricing. It’s a pricing method where a fixed percentage is added on top of the cost to produce

A price index (PI) is a measure of how prices change over a period of time, or in other words, it is a way to measure inflation. There are multiple methods on how to calculate inflation (or deflation).

Reference: CIPS study guide page 176-179

LO 3, AC 3.3