Cost-Savings Sharing Pricing Defined?

Q: What Is Quantity Discount Analysis Illustrated?

A: Cost:   It is the economic value of resources incurred by a firm to manufacture a product or render…

Q: Under what conditions is a market-based transfer price most likely to be used?

A: Transfer Pricing: It is termed as the cost which is charged by the one department of the company…

Q: What is purchasing power parity?

A: Purchasing power parity (PPP): It is one well known macroeconomic investigation metric for…

Q: What is a transfer price? What are the three main approaches to setting transfer prices?

A: Transfer pricing:   Transfer pricing refers to the setting of prices for goods and services that are…

Q: What are the calculation formulas for transfer pricing?

A: There are many methods for determining the transfer price. Most businesses actually set the transfer…

Q: what is the benefit cost ratio?

A: net present value revenue = 1.5 cost revenue - cost = NPV 1.5cost -cost = 250000 cost = 500000…

Q: Explain the difference between price-takers and price-setters.

A: When a company cannot dictate prices then it is known as price taker. On the contrary, when a…

Q: Cost behavior Costs Value Chain O Cost drivers

A: Answer: Cost behavior is defined as the changing nature of cost dependent on any units. Costs are of…

Q: Define pricing decisions.

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

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: What is Market Value Added (MVA)?

A: The market value added is the difference of the current value of the company and the equity capital…

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: “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 is opportunity cost rate?

A: The opportunity cost is the cost of the option or alternative missed due to the acceptance of the…

Q: e contribution margin percentage?

A: Contribution Margin % = (( Sales Revenue - Variable cost )/(Sales revenue ) ) * 100

Q: Define the term “opportunity cost.” How may this cost be relevant in a make-or-buy decision?

A: Cost is defined as the total amount of money spent by the company for the production or creation of…

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: Define Incremental Borrowing Cost?

A: Incremental borrowing cost is used in the context of the cost of borrowing additional funds.

Q: Under what conditions is a market-based transfer price optimal?

A:

Q: political cost hypothesis

A: Political cost hypothesis states that if the political costs are higher, managers use accounting…

Q: How does opportunity cost enter into a make or buy decision?

A: Opportunity Cost:   Opportunity Cost is the future capacity or potential advantage that can be…

Q: Which costs make up “prime” costs？

A: Prime cost is that cost, which is directly concerned with the product such as direct material,…

Q: What is target pricing? Who uses it?

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

Q: Explain CMO Price Behavior and Prepayment Rates?

A: The question is based on the concept of Collateralized Mortgage Obligations (CMO) , interest rate…

Q: What is target profit?

A: Target costing:   Target costing is a business procedure that targets the cost at the earliest…

Q: What is the perform

A: one of the objectives of transfer pricing is to performance evaluation and improve the same . fair…

Q: Define “Market Value Added (MVA)” and “Economic Value Added(EVA).”

A: Introduction: Economic value added (EVA) and Market value added (MVA) are computations utilized to…

Q: maximization goal?

A: According to standard theory of the firm, profit maximization is taken into account to be the…

Q: cost benefit model

A: The benefit under the cost-benefit model is calculated by deducting the associated cost from the…

Q: Define opportunity cost

A: Opportunity costs represent the benefits an individual, investor or business misses out onwhen…

Q: Define the term an incremental benefit-cost ratio?

A: The incremental cost is the additional cost incurred for producing an additional one unit of a…

Q: What is Transfer Pricing? What are the approaches in determining transfer prices? In your own…

A: Explanation of transfer pricing and approaches determining transfer pricing are as follows.

Q: Pricing Strategy

A: Answer: Pricing strategy refers to the method by which companies use to fix the prices for their…

Q: Explain price/EBITDA ratio

A: The EV/EBITDA ratio compares a company's enterprise value to its earnings before interest, taxes,…

Q: When is it more appropriate to use market-based transfer price rather than cost-based transfer…

A: Transfer pricing:- Its the price at which one unit of a company sells goods to its another unit.…

Q: Describe the Define the term Benefit-Cost Ratio?

A: Cost benefit analysis is a quantitative approach used by top level management to evaluate the…