Question

Which of the following pricing strategies is most likely to lead to long-term financial sustainability?

Answer 1

Answer:

Full cost is a pricing strategies which is most likely to lead to long-term financial sustainability

Explanation:

Full cost: It includes all types of cost which includes fixed cost, the variable cost  which is used to compute the total cost per unit . where, fixed cost is that cost which remains same if production level also increases and, the variable cost is that cost which is changes when production level changes.

Marginal cost: It is the cost that is added when extra goods and services are produced.

Direct cost: It is that cost which is directly related to the production level. Example: direct material, direct labor, etc.

Indirect cost: It is that cost which is not related to the production level Example: Overhead cost, security cost, etc.

Variable cost: It is that cost which is changes when production level changes whether increase or decrease.

All other costs other than full cost is not used for long term financial sustainability because full cost includes all types of cost.

Hence, Full cost is a pricing strategies which is most likely to lead to long-term financial sustainability