{"id":198369,"date":"2025-03-08T16:44:04","date_gmt":"2025-03-08T16:44:04","guid":{"rendered":"https:\/\/learnexams.com\/blog\/?p=198369"},"modified":"2025-03-08T16:44:06","modified_gmt":"2025-03-08T16:44:06","slug":"the-current-selling-price-for-the-pluto-a-mid-sized-car-is-19000","status":"publish","type":"post","link":"https:\/\/www.learnexams.com\/blog\/2025\/03\/08\/the-current-selling-price-for-the-pluto-a-mid-sized-car-is-19000\/","title":{"rendered":"The current selling price for the Pluto, a mid-sized car, is $19,000"},"content":{"rendered":"\n

The current selling price for the Pluto, a mid-sized car, is $19,000. For next year it is anticipated that Pluto will have a $12,000 cost base. What is its prospective selling price, using cost-plus pricing, if the company desires a markup component of 15 percent?<\/p>\n\n\n\n

A) $10,200<\/p>\n\n\n\n

B) $13,800<\/p>\n\n\n\n

C) $19,000<\/p>\n\n\n\n

D) $30,000<\/p>\n\n\n\n

E) $31,000<\/p>\n\n\n\n

The correct answer and explanation is :<\/strong><\/mark><\/p>\n\n\n\n

The correct answer is B) $13,800<\/strong>.<\/p>\n\n\n\n

Explanation:<\/h3>\n\n\n\n

Cost-plus pricing is a method where the selling price is determined by adding a markup to the cost of the product. The formula for cost-plus pricing is:<\/p>\n\n\n\n

[
\\text{Selling Price} = \\text{Cost Base} + (\\text{Markup Percentage} \\times \\text{Cost Base})
]<\/p>\n\n\n\n

Where:<\/p>\n\n\n\n

    \n
  • Cost Base<\/strong> is the cost of producing or acquiring the product.<\/li>\n\n\n\n
  • Markup Percentage<\/strong> is the percentage by which the company wants to increase the cost to generate profit.<\/li>\n<\/ul>\n\n\n\n

    In this case:<\/p>\n\n\n\n

      \n
    • The Cost Base<\/strong> for the Pluto car next year is given as $12,000.<\/li>\n\n\n\n
    • The Markup Percentage<\/strong> is 15%, or 0.15 in decimal form.<\/li>\n<\/ul>\n\n\n\n

      We can calculate the prospective selling price as follows:<\/p>\n\n\n\n

      [
      \\text{Selling Price} = 12,000 + (0.15 \\times 12,000)
      ]
      [
      \\text{Selling Price} = 12,000 + 1,800
      ]
      [
      \\text{Selling Price} = 13,800
      ]<\/p>\n\n\n\n

      Thus, the prospective selling price<\/strong> of the Pluto car using cost-plus pricing with a 15% markup is $13,800<\/strong>.<\/p>\n\n\n\n

      Why This Approach?<\/h3>\n\n\n\n

      Cost-plus pricing is a common pricing strategy used by businesses to ensure they cover the costs of production and make a desired profit margin. In this case, by adding 15% to the anticipated cost base of $12,000, the company ensures that it generates a profit that aligns with its targeted markup percentage.<\/p>\n\n\n\n

      This method is simple and straightforward, making it an attractive choice for many companies, especially when the cost base is predictable and stable.<\/p>\n\n\n\n

      \"\"<\/figure>\n\n\n\n

      Here is a visual representation of the cost-plus pricing calculation for the Pluto car. The chart illustrates the breakdown of the cost base, markup, and selling price.<\/p>\n\n\n\n

        \n
      • The Cost Base<\/strong> is $12,000.<\/li>\n\n\n\n
      • The Markup<\/strong> added is 15% of the cost base, which amounts to $1,800.<\/li>\n\n\n\n
      • The Selling Price<\/strong> after adding the markup is $13,800.<\/li>\n<\/ul>\n\n\n\n

        This is how the cost-plus pricing method works in determining the final selling price.<\/p>\n","protected":false},"excerpt":{"rendered":"

        The current selling price for the Pluto, a mid-sized car, is $19,000. For next year it is anticipated that Pluto will have a $12,000 cost base. What is its prospective selling price, using cost-plus pricing, if the company desires a markup component of 15 percent? A) $10,200 B) $13,800 C) $19,000 D) $30,000 E) $31,000 […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[25],"tags":[],"class_list":["post-198369","post","type-post","status-publish","format-standard","hentry","category-exams-certification"],"_links":{"self":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/198369","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/comments?post=198369"}],"version-history":[{"count":0,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/198369\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/media?parent=198369"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/categories?post=198369"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/tags?post=198369"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}