Answer:
a. An appropriate markup percentage is always required in cost-based pricing.
Explanation:
Under cost based pricing, the proper cost of manufacturing each product is identified and then the expected profit is added to get the selling price.
Basically it is a strategy to control cost prices and not adjusting and earning the desired profit.
As for example, if the net estimated cost of a product = $100
And the manufacturer wants to earn a profit of $20 then, he will add this profit margin as 20% on cost to get the selling price.
= $100 + 20% = $120
