When goods are sent to the branch at cost plus mark-up, it means that the branch should sell at
- a price above or below the stipulated price
-
any price but not below the transfer price
- cost price
- a price that is equal to the mark-up
The correct answer is: B
Explanation
Cost-plus pricing is a pricing strategy in which the selling price is determined by adding a specific amount markup to a product's unit cost.
Cost plus pricing involves adding a markup to the cost of goods and services to arrive at a selling price. Under this approach, you add together the direct materialcost, direct labor cost, and overhead costs for a product, and add to it a markuppercentage in order to derive the price of the product.