when a firm adds a predetermined percentage to the cost of its product for pricing purposes, it is called cost-plus pricing.
Cost-plus pricing is a method of determining a product's selling price by increasing the unit cost of the product by a certain fixed percentage. In essence, the markup % is a strategy for achieving a specific desired rate of return.
Cost Plus Pricing is a relatively straightforward pricing method where you choose how much more you'll charge for a product than its cost. For instance, you can decide that you want to charge 10% more for pies than it costs to prepare them from scratch. Then, your cost would be equal to 100% of your pricing.
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