6.4 Price Quotation Methods & Casket Pricing Systems
Key Takeaways
- The five classic price quotation methods are itemization, package, unit, bi-unit, and functional pricing; tri-unit is the three-figure variant of bi-unit
- Unit pricing quotes ONE figure covering services and casket together; bi-unit splits services from casket; tri-unit splits services, facilities, and casket
- Functional pricing groups charges into major component parts such as professional services, care of remains, facilities, automotive, and merchandise
- The FTC Funeral Rule requires itemization of the 16 GPL categories; unit, bi-unit, tri-unit, and package figures may be offered only in addition to itemized prices
- Casket prices are set internally by markup systems (times-the-cost multiple, graduated recovery, fixed-dollar markup); the method of setting a price is not the method of quoting it
6.4 Price Quotation Methods & Casket Pricing Systems
Quick Answer: A price quotation method is how the firm presents charges to the family. The classic set is itemization, package pricing, unit pricing, bi-unit pricing, and functional pricing, with tri-unit as the three-figure variant. Since the FTC Funeral Rule took effect in 1984, itemization is mandatory—every other method may appear only in addition to itemized prices. Separately, casket pricing systems (times-the-cost multiples, graduated recovery, fixed-dollar markup) are how the firm sets the numbers internally. Domain II items test both vocabularies, and they are not interchangeable.
Quotation Method vs Pricing System (Get This Distinction First)
Exam writers separate two ideas that students routinely blend:
| Concept | Question it answers | Example terms |
|---|---|---|
| Price quotation method | How is the charge shown to the family? | Itemization, package, unit, bi-unit, tri-unit, functional |
| Pricing system / markup method | How did the firm arrive at that number? | Times-the-cost multiple, graduated recovery, fixed-dollar markup, percentage markup |
A stem that says "a method of price quotation showing separately the price of the service and the price of the casket" is asking for bi-unit. A stem that says "the firm multiplies wholesale casket cost by a factor that decreases as cost rises" is asking for graduated recovery. Read for quotation versus setting.
The Five Classic Price Quotation Methods
| Method | Definition | Number of figures the family sees |
|---|---|---|
| Itemization (multi-unit) | Each good and each service is priced separately | Many (the Rule's 16 required categories that the firm offers, plus optional items) |
| Package pricing | A single dollar amount identifies the charge for a bundle of goods and/or services | One per package, alongside required itemized prices |
| Unit pricing (single-unit) | One price includes both the service and the casket | 1 |
| Bi-unit pricing | Shows separately the price of the service and the price of the casket | 2 |
| Tri-unit pricing | Shows separately the price of services, facilities/equipment, and the casket | 3 |
| Functional pricing | Charges are broken into several major component parts (functions) such as professional services, care of remains, facilities, automotive, and merchandise | Typically 4–5 |
Memory hook: unit = 1, bi = 2, tri = 3, functional = a handful of functions, itemization = everything.
Same Funeral, Five Ways: A Worked Example
A firm's itemized charges for a full-service funeral with visitation and earth burial:
| Itemized category | Price |
|---|---|
| Basic services of funeral director and staff | $2,500 |
| Transfer of remains to the funeral home | $395 |
| Embalming | $895 |
| Other preparation of the body | $295 |
| Use of facilities and staff for visitation | $650 |
| Use of facilities and staff for funeral ceremony | $650 |
| Hearse | $395 |
| Limousine | $325 |
| Casket | $3,200 |
| Total | $9,305 |
Now watch the same $9,305 change shape:
| Method | How it is quoted | Arithmetic check |
|---|---|---|
| Unit | "Complete funeral including casket: $9,305" | 9,305 |
| Bi-unit | "Professional services, facilities, and vehicles: $6,105; casket: $3,200" | 6,105 + 3,200 = 9,305 |
| Tri-unit | "Professional services: $4,085; facilities and vehicles: $2,020; casket: $3,200" | 4,085 + 2,020 + 3,200 = 9,305 |
| Functional | Professional services $2,500; care/preparation of remains $1,190; facilities $1,300; automotive $1,115; merchandise $3,200 | 2,500 + 1,190 + 1,300 + 1,115 + 3,200 = 9,305 |
| Itemization | All nine lines above, each with its own price | 9,305 |
Notice what shrinks as you move up the table: the family's ability to decline a single component. Under unit pricing a family cannot see—much less refuse—the $325 limousine. That visibility problem is exactly why the Funeral Rule intervened.
Why the Funeral Rule Changed the Answer
Before April 30, 1984, unit pricing dominated American funeral service: one casket-anchored figure carried the entire funeral, and the casket the family chose effectively determined the total price of everything else. The FTC Funeral Rule (16 C.F.R. Part 453) made itemization the required method of quotation, requiring separate prices for the 16 categories a firm offers on its General Price List.
| Rule constraint | What it means for quotation methods |
|---|---|
| Itemized prices are required | Every firm must be able to quote the 16 applicable categories separately |
| Packages are permitted in addition to, never instead of, itemization | A package flyer is legal; a package-only price presentation is not |
| Unit / bi-unit / tri-unit / functional figures may be offered | Only as supplementary quotes alongside the itemized GPL |
| Consumers may buy only what they want | Subject to the non-declinable basic services fee and genuine legal/cemetery/crematory requirements |
| Required categories cannot be listed "free" | Burying a required item's cost in other prices defeats the right to decline it |
Exam framing: "Which price quotation method does the FTC Funeral Rule require?" → Itemization. "Does the Rule forbid package pricing?" → No—it forbids offering packages instead of itemized prices.
Casket Pricing Systems (How the Number Gets Set)
These are internal management methods; the family never hears the vocabulary, but the NBE expects you to recognize it.
| System | Mechanic | Practical effect |
|---|---|---|
| Times-the-cost multiple | Retail = wholesale cost × a fixed factor (e.g., 4×, 5×) | Simple; produces very large dollar spreads at the premium end |
| Graduated recovery | The multiple or percentage declines as wholesale cost rises | Compresses premium prices; narrows the top of the line |
| Fixed-dollar markup | The same dollar amount is added to every unit | Flattens the line; cheapest and dearest units differ only by true cost |
| Percentage markup | A stated percentage is added to cost | Between fixed-dollar and straight multiple in effect |
Why it matters ethically: a steep times-the-cost line creates a large financial gap between adjacent showroom units, which raises the pressure a grieving family feels at each step. A graduated or fixed-dollar line narrows that gap. Neither is illegal, and markup itself is not a Funeral Rule violation—deception is. Section 6.3 covers the ethical sales boundary in full.
Related Selection-Room Terms
| Term | Meaning |
|---|---|
| Complete selection | The full range of units the firm makes available, including those shown only by catalog or sample |
| Adequate selection | A range broad enough that families at different budget levels have real, dignified choices |
| Price banding / zoning | Grouping displayed units by price tier so comparison is orderly |
| Direct cremation and immediate burial prices | Required GPL categories that must be quoted as a price range with the container/casket pathways described |
NBE Traps for This Section
| Trap | Correction |
|---|---|
| Unit pricing is illegal | Unit figures may be offered in addition to required itemization; only replacing itemization is prohibited |
| Bi-unit and functional are the same | Bi-unit = 2 figures (services / casket); functional = several functional components |
| Tri-unit means three price lists | It means three quoted figures—services, facilities, casket—not GPL/CPL/OBCPL |
| Package pricing violates the Rule | Packages are lawful alongside itemized prices |
| "Functional pricing" describes how caskets are marked up | Functional pricing is a quotation method; markup systems are times-the-cost, graduated recovery, fixed-dollar |
| Itemization has always been standard | Unit pricing dominated before the Funeral Rule's 1984 effective date |
| Graduated recovery raises the markup on expensive caskets | It lowers the multiple as cost rises |
Bottom line: Name each quotation method by its figure count and content, reproduce the same funeral under each, and remember the one-line legal rule—itemization is required; everything else is optional and additive. Then keep quotation vocabulary separate from the internal markup systems that set casket prices in the first place.
A funeral home quotes a family two numbers: $6,105 for professional services, facilities, and vehicles, and $3,200 for the casket. Which price quotation method is this?
Which price quotation method does the FTC Funeral Rule require every covered funeral provider to use?
A firm sets casket retail prices so that the multiple applied to wholesale cost decreases as the wholesale cost rises. What is this casket pricing system called?
Before the Funeral Rule's 1984 effective date, which quotation method dominated American funeral service, and why did the FTC target it?