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

Q: What is target costing and how is it different from the usual process of setting prices?

A: The price of a product is set on the basis of the cost of the product. The price of the product is…

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: What is cost-plus pricing? Who uses it?

A:

Q: What do you understand by rate of markup on cost and rate of markup on selling price, illustrate…

A: Answer: Mark-up is nothing but the difference between a good or service’s selling price and its…

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: Understand and apply the lower-of-cost-or-net realizable value rule.

A:

Q: Explanation of the meaning of the target costing ?

A: Cost accounting system is a framework that guides the firm to calculate their cost and helps in…

Q: What is a cost driver?

A: A cost driver is a concept used in management accounting. The cost of specific business operations…

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: Determining the best approach to pricing requires a cost-benefit trade-off. Explain.

A: The best approach to pricing requires the cost benefit trade-off is explained as below, The Best…

Q: What does the price earning ratio indicate?

A: Price to earnings ratio (P/E ratio) compares the price with earnings per share. It will be…

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: What are the advantages and disadvantages of target pricing versus cost-based pricing?

A: Advantages of target pricing are as follows: It help in controlling in cost It provide profit with…

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: 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: What is the perform

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

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: Explain the impact of the cost-volume-profit connection on pricing strategy.

A: The cost volume profit analysis analyse the impact of the variable cost and fixed cost on the…

Q: Why do you think that having a price structure important?

A: Pricing strategies are the methods companies use to price products and services. Almost all…

Q: What is a quantity standard? What is a price standard?

A: Quantity Standard : A quantity standard is the amount of an input, such as labor time or raw…

Q: What is importants of Price and quality?

A: Price plays an important role for buyers and sellers both because the seller wants to charge a high…

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: What is the formulae used to find markup price?

A: Markup price is the price that the player comes up with after adding the mark up to the cost price…

Q: What is cost hierarchy?

A: Cost:   Cost can be defined as the cash and cash equivalent which is incurred against the products…

Q: Explain price/EBITDA ratio

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

Q: What is a cost-volume-profit analysis?

A: Cost: The amount paid to purchase the asset, install it, and put it into operations, is referred to…

Q: what consequences can broad averaging have on costs?

A: Broad Averaging: Broad averaging is also known as peanut butter cost is a costing approach of…

Q: Define the term price-setters.

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

Q: What is the role of Cost Accounting in Price Determination ?

A: The primary difference between fixed as well as variable costs is made in cost accounting.…

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: 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: Which of the following is the best definition of a variable cost?

A: Types of Costs 1. Variable Cost: The cost which changes with the change in the level of activity is…

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.