Cost-based pricing entails establishing prices based on the costs of successfully making and marketing a product and earning an acceptable margin or profit.

True or False?

Correct answer is TRUE

Explanation:

Cost-based pricing is a method used to determine the selling price of the product based on the cost of production and selling expenses incurred based on the previous production or on the same industry then add the desire margin that the firm wants to attain. It is important that the firm will account properly the total cost of the product before they will add the profit element that they wished to attain.