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Enterprise Marketing — Entrepreneurship STD 12 Commerce — Question

CBSE BoardEnglish MediumSTD 12 CommerceEntrepreneurshipEnterprise Marketing4 Marks
Question
Distinguish between the cost-plus pricing method, vs. variable pricing method.
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Answer

Difference between cost-plus pricing method and variable plus pricing method.
Cost Plus Pricing Method: In this method the total cost of the product is first determined. The total cost is the sum of the variable costs and the fixed costs that are attributable to one unit of the product A predetermined margin of profit is then added to the above to determine the sale price.
Variable Price Method: Some entrepreneurs fancy to adopt a policy of different prices from different customers depending upon the situation prevailing in the market. This policy is usually adopted when the entrepreneurs deal with different market segments.

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