Question

Difference between marginal cost pricing and cost plus pricing

Answer 1

Marginal-Cost Pricing. In a marginal-cost pricing system, the cost of the product does not include fixed costs that are not specific to that product. ... Instead, the owner calculates the costs for producing that particular candle and then adds a margin equal to the cost of making one more candle.

Answer 2

»

Business Planning & Strategy»

Pricing Strategy»

Differences Between Full-Cost & Marginal-Cost Pricing Strategies

by Scott Thompson



Cost-based pricing strategies use the cost of producing the product as a base. They may or may not include an additional profit. Marginal-cost pricing strategies aim recover not only the cost of making the product, but enough extra to make one more of the same product.