Cost-Based Pricing
Setting a price by choosing a desired per unit profit and adding it to per unit cost.
It suits businesses whose costs are clearly defined and easy to show a customer, which is why contractors quote materials plus labor plus a markup.
Often Confused With
- Value-Based Pricing
- Cost based pricing works forward from the ledger; value based pricing works backward from the customer.
Taught In
See Also
2.5.A.5