ABC manufactures wreaths according to customer specifications and ships them to customers using a logistics organization such as FedEx. Which two terms below describe the cost of shipping these wreaths?

ABC manufactures wreaths according to customer specifications and ships them to customers using a logistics organization such as FedEx. Which two terms below describe the cost of shipping these wreaths?

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter12: Differential Analysis And Product Pricing

Section: Chapter Questions

Problem 4SEQ: For which cost concept used in applying (he cost-plus, approach to product pricing are fixed...

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Concept explainers

Pricing

Pricing is used as a term in finance and economics, pricing is the process of fixing a value for a product or a service. Pricing establishes a value for a product or service that the customer has to pay. A business can choose from different strategies while deciding to set prices.

Question

Accounting
ABC manufactures wreaths according to customer specifications and ships
them to customers using a logistics organization such as FedEx. Which two
terms below describe the cost of shipping these wreaths?
a. Variable cost and Period cost
b. Fixed cost and Period cost
c. Variable cost and Product cost
d. Fixed cost and Product cost

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