Cost-Based Pricing for Services Challenges

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Questions and Answers

Why is cost-based pricing often more difficult for services?

Workforce turnover is low in most service industries, making cost estimation easier.
The cost of goods sold is a small or nonexistent portion of the total cost for intangible products. (correct)
It is easier to forecast labor needs accurately in service settings compared to tangible product settings.
Finding good personnel is not an ongoing challenge in service industries.

What contributes to the challenge of accurately forecasting labor needs in many service settings?

Ease of finding good personnel
Fluctuating demand in service settings (correct)
Stable workforce turnover in service industries
High percentage of cost of goods sold in service industry

Why is finding good personnel considered an ongoing challenge in service industries?

Low workforce turnover and ease of finding good personnel
Stable labor needs and fluctuating demand
High workforce turnover and difficulty in finding good personnel (correct)
High percentage of cost of goods sold in service industry

What makes cost-based pricing more difficult for services compared to tangible product settings?

<p>The small or nonexistent portion of the total cost that is attributed to cost of goods sold for intangible products (C)</p> Signup and view all the answers

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