What is Blended Costing?

Blended costing is a pricing strategy that combines both fixed and variable costs to determine the overall cost of a product or service. This approach helps businesses allocate costs more accurately and can be useful for setting prices that reflect the true cost of production. By considering both types of costs, companies can make more informed financial decisions and enhance their profitability. Blended costing is particularly beneficial in industries where costs fluctuate significantly.