Describe two alternative approaches to long-run pricing decisions.

Q: In theory, the optimal method for establishing a transfer price is   incremental cost market price…

A: Solution: In theory, the optimal method for establishing a transfer price is "Market price" so that…

Q: Cost-Savings Sharing Pricing Defined?

A: It is a project pricing technique where the savings in the cost of the project are mutually shared…

Q: nother cost-based approach to pricing is called time and material pricing. Under this approach, two…

A: Answer: Some companies--partiicularly in service industries-- use a variiation of cost and pricing…

Q: Define the term price-takers.

A: Price takers is the term used for individual or a company which cannot influence the price of a…

Q: Calculate Firefly Corporation's markup percentage using (a) absorption-cost pricing and (b)…

A: In order to take the pricing decisions, and formulating policies regarding cost of a product, a…

Q: Describe three alternative cost-plus pricing methods.

A: Target Costing:Target costing refers to the cost that is ascertained as per the needs and wants of…

Q: A quantitative analysis enables a decision maker to put a “price” on the sum total of the…

A: Definition: Quantitative analysis: A quantitative analysis focuses on the factors in a decision…

Q: Explain the difference between market-based transfer prices and cost-based transfer prices.

A: Market based Transfer Price and Cost Based Transfer Price: Transfer pricing refers to the rules and…

Q: When should special pricing orders be accepted?

A: Special pricing order: A special order is a unique one time order made by a customer. In this order…

Q: Explain price improvement

A: It is a process where the purchasing customer gets the opportunity to buy shares at a lower cost…

Q: Describe the downward demand spiral and its implications for pricing decisions.

A: Downward Demand Spiral: A downward demand spiral is a continuing reduction in the demand for a…

Q: Distinguish between market-skimming pricing and market-penetration pricing.

A: Product pricing strategies: There are two product pricing strategies of a company. They are,…

Q: What Is Prerequisites for Successful Target and Cost-Based Pricing?

A: Cost accounting is the branch of accounting that inspects the cost structure of a business. This…

Q: “Relevant costs for pricing decisions are full costs of the product.” Do you agree? Explain.

A: Pricing Decisions:Pricing decisions are those decisions that are related to ascertain the price of a…

Q: What do you mean when you say "fixed costs"? What's the point? Is it possible to have a combined…

A: Introduction: Costs are the costs that a company incurs when it is in operation. It includes the…

Q: Define special pricing.

A: Pricing: Pricing is a process where manufacturing company fixes prices for the products that are…

Q: With respect to Pricing decision in Cost Accounting, state any 4 situations where pricing below…

A: Pricing decision plays an important role in an product sales and growth where the price of the…

Q: Describe three limitations of the economic, profitmaximizing model of pricing.

A: Profit maximizing price: The price for which the relative quantity is identified by the intersection…

Q: Describe three alternatives of cost-plus pricing methods?

A: Cost-plus pricing is a method in which the selling price is set by evaluating all variable costs a…

Q: What questions should managers answer when considering special pricing orders?

A: Definition:   Special Pricing: When businesses get Special orders from its customers for bulk…

Q: What is the primary disadvantage of basing the costplus pricing formula on absorption cost?

A: Definition: Cost plus-pricing approach: The pricing approach used by the companies to set the target…

Q: which of the following could affect the price

A: Stocks are prone to systematic and unsystematic risks. Factors or risk that affect the entire…

Q: Write the general formula for cost-plus pricing, and briefly explain its use.

A: Cost-plus pricing: It can be defined as the pricing strategy which includes the determination of the…

Q: Explain how cost-of-carry is a factor in forward curve prices.

A: Cost of carry is the costs of holding the certain position in the market or in other words it is the…

Q: Define the term pricing decisions.

A: Selling Price:   It refers to the price at which the product or service will be sold in the market…

Q: Distinguish between the downward demand spiral and the ramifications of this for price choices

A: This question tells about  the downward demand spiral and the ramifications of this for price…

Q: Why is an incremental analysis necessary when conducting a rate of return analysis for cost…

A: Incremental analysis considers only the relevant cash flows and it does not consider the…

Q: Determine which of the following two alternatives is the most efficient and which is the most…

A: Internal Rate of Return: It is the rate at which a project's or investment's net present value…

Q: Which of the following material issue pricing method follows only on the average purchasing price of…

A: The average price is taken in weighted and simple average price method.

Q: Explain how negotiation between the supplying and buying units may be used to set transfer prices.…

A: Cost accounting is the branch of accounting that inspects the cost structure of a business. This…

Q: Describe the uses of target pricing.

A: Target pricing: A pricing method which is used to identify the price at which the product will be…

Q: What are the three major influences on pricing decisions?

A: Pricing Decisions:Pricing decisions are those decisions that are related to ascertain the price of a…

Q: Enumerate and explain briefly the limitations of using CVP analysis in pricing decisions.

A: Cost Volume Profit (CVP) analysis is a way to find out how changes in variable and fixed costs…

Q: What is the quantity decision? The pricing decision?

A:

Q: Define the term product pricing.

A: Managerial accounting:   Managerial accounting is more focused towards analyzing information and…

Q: if we produce goods over the capacity, should we consider the fixed marketing cost and variable…

A: Fixed marketing costs is fixed costs related with the marketing of the product and this will not be…

Q: Explain the following assertion: “Price setting generally requires a balance between market forces…

A: Businesses have to make a lot of decisions in running a business one of which is price setting. They…

Q: List the four common cost bases used in cost-plus pricing. How can they all result in the same…

A: The profits can be arrived from the income statement of the company. All the revenues, and expenses…

Pricing

Pricing is used as a term in finance and economics, pricing is the process of fixing a value for a product or a service. Pricing establishes a value for a product or service that the customer has to pay. A business can choose from different strategies while deciding to set prices.