Sign In
Not register? Register Now!
Essay Available:
You are here: HomeEssayAccounting, Finance, SPSS
Pages:
1 page/≈275 words
Sources:
Level:
APA
Subject:
Accounting, Finance, SPSS
Type:
Essay
Language:
English (U.S.)
Document:
MS Word
Date:
Total cost:
$ 4.68
Topic:

Cost Plus Pricing (Essay Sample)

Instructions:

Pricing strategies

source..
Content:

Name
Institution
Course
Date

Cost-plus pricing strategy is mainly used by businesses that are market leaders. In this strategy, the business determines a desirable margin for its products and adds this to the total cost of production to come up with the price. The cost of a product is called the full cost and is the sum of all expenses involved in production of a good or service. This includes the manufacturing cost, the delivery cost and all other administrative expenses.
The profit mark-up is the percentage added on the cost of a product for it to be profitable. Profit margin is the percentage of price that represents profit. For a market leader, the mark-up will be an arbitrary figure, which the management thinks will result in highest profits. Some companies calculate their profit margins based on ratios such as return on sales.
Firms, which have a contract with the customer where the customer reimburses the firm for all the costs involved in production of a product, may use this pricing strategy. The firm is in business and therefore the returns have to be higher than the cost of production. The firm has to determine an appropriate mark-up figure before charging the client.
This pricing strategy has the advantage of assured profits for ...
Get the Whole Paper!
Not exactly what you need?
Do you need a custom essay? Order right now:

Other Topics:

  • Total Cost Minimization
    Description: One was required to formulate an argumentative essay about the advantages and disadvantages of modern assembly lines...
    1 page/≈275 words| No Sources | APA | Accounting, Finance, SPSS | Essay |
  • Accounting And Finance For Managers: Defects Of Theory
    Description: Discuss The Defects Of His Theory. For Example, One Of The Defects About His Theory Is That He Spoke About Computer Industry In American Perspective...
    13 pages/≈3575 words| 6 Sources | APA | Accounting, Finance, SPSS | Essay |
  • Issues In Money, Banking And Finance: Theoretical Perspective
    Description: Outline the conditions for the success of a Currency Board in a modern economy. What types of economy are suitable for a Currency Board system? Accounting, Finance, SPSS Essay...
    1 page/≈275 words| 31 Sources | APA | Accounting, Finance, SPSS | Essay |
Need a Custom Essay Written?
First time 15% Discount!