Question

When using _____, the seller pays all or part of the actual shipment charges and does not pass them on to the buyer.

Answer 1

Answer:

freight absorption pricing

Explanation:

Freight Absorption Pricing. a pricing method in which the manufacturer bears some or all of the freight costs involved in transporting the goods to the customer.

Answer 2

Answer: freight-absorption pricing

Explanation: Freight is simply defined as payment for transportation of goods. In the freight-absorption pricing, the seller pays all or part of the actual shipment charges and does not pass them on to the buyer. Thus, the seller absorbs all or part of the transportation costs based on the reasoning that more sales would decrease average costs which will in turn decrease and more than compensate for transportation costs. It is a form of absorption pricing that is done in order to capture the business thereby ensuring the business maintains profitability over the long-term.