Which term is defined as a model in which the final sale price is based on the cost to produce the product plus a small markup?

• A. A shared, unalterable ledger used to record transactions and track assets through a supply chain or business network.
• B. A long-term agreement in which a dealer or manufacturer loans goods to a retailer.
• C. Model in which final sale price is based on the cost to produce the product plus a small markup.
• D. A set of policies and processes that enable an organization to reduce environmental impacts and increase operating efficiency.

Answer: (C)

Cost-plus pricing is a model where the final selling price is determined by adding a markup to the cost of producing the product. This approach ensures costs are covered and provides a predictable profit margin, making pricing straightforward—especially when production costs are stable. For example, if producing an item costs $100 and you apply a 20% markup, the final price would be $120.

This method is practical when you want consistency and simplicity in pricing, but it may not account for market demand or competitor prices, which can lead to prices that aren’t aligned with what buyers are willing to pay.

The other descriptions point to concepts unrelated to pricing: a shared, unalterable ledger is a blockchain or distributed ledger; a long-term agreement where a dealer loans goods to a retailer describes a consignment or floor-plan arrangement; and a set of policies and processes for reducing environmental impact refers to an environmental management or sustainability program.