Cost Plus Pricing - Price setter. Cost Accounting and Managerial Accounting. CPA exam BAR. CMA Exam
Channel: Farhat Lectures. The # 1 CPA & Accounting Courses
Date: 2020-09-22

Cost-plus pricing is a pricing strategy in which the selling price is determined by adding a specific markup to a product's unit cost. Cost-plus pricing is often used on government contracts (cost-plus contracts).

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 An alternative pricing method is value-based pricing.
Cost breakdowns must be deliberately maintained. This information is necessary to generate accurate cost estimates.

Cost-plus pricing is especially common for utilities and single-buyer products that are manufactured to the buyer's specification such as military procurement.