Asked by Kanidra Stringer on Jul 08, 2024
Verified
Contractors who sell to government agencies would be most likely to use which of the following cost methods in pricing their products?
A) variable cost method
B) product cost method
C) total cost method
D) fixed cost method
Total Cost Method
An accounting approach where all costs of production, including variable and fixed, are used to value inventory and determine cost of goods sold.
Government Agencies
Public sector organizations established at federal, state, or local levels to administer specific functions and services on behalf of the government.
- Comprehend the principles of the cost-plus model for determining product prices.
Verified Answer
SP
Shykecema PaigeJul 13, 2024
Final Answer :
C
Explanation :
Contractors selling to government agencies typically use the total cost method for pricing their products. This method includes all costs associated with the production of a good or service, ensuring that the price covers both variable and fixed costs, making it suitable for contracts where full cost recovery is important.
Learning Objectives
- Comprehend the principles of the cost-plus model for determining product prices.
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