Question

Under wha pricing method, fixed cost is ignored​

Answer 1

Answer:

When fixed costs are ignored because they are irrelevant to a business's production decision, they are called explicit costs.

Answer 2

Answer:

Under marginal cost pricing, fixed cost is ignored.

Explanation:

1. .Marginal cost pricing is the practice of adjusting a product's price to reflect the additional cost of producing an extra unit of output.
2. According to this strategy, a manufacturer only charges the addition to the total cost arising from materials and direct labour for each product unit sold.
3. To determine the selling price, marginal cost pricing adds a profit margin to the marginal cost.
4. Full cost pricing, on the other hand, determines the selling price by adding average fixed costs and a profit margin to the marginal cost.

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