Cost-Plus Pricing

This article describe about Cost-Plus Pricing, which is a straightforward and simple way to arrive at a sales price by adding a markup to the cost of a product. It is a main part of pricing history even if it seems to be used less and less. It is often used on government contracts, and was criticized for reducing pressure on suppliers to control direct costs, indirect costs and fixed costs whether related to the production and sale of the product or service or not. It is a way to induce a seller to accept a contract whose total costs represent a large fraction of the seller’s revenues.