A product has a prime cost of £15, variable overhead of £5 per unit and fixed overheads of £8 per unit. Which pricing policy gives the highest price? A. Prime cost +60% B. Marginal cost+40% C. Average Total Costs +10% D. Net margin of 20% on selling price.

A product has a prime cost of £15, variable overhead of £5 per unit and fixed overheads of £8 per unit. Which pricing policy gives the highest price? A. Prime cost +60% B. Marginal cost+40% C. Average Total Costs +10% D. Net margin of 20% on selling price.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

A product has a prime cost of £15, variable overhead of £5 per unit and fixed
overheads of £8 per unit.
Which pricing policy gives the highest price?
A. Prime cost +60%
B. Marginal cost+40%
C. Average Total Costs +10%
D. Net margin of 20% on selling price.

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