Running head: COSTING AND PRICING DECISIONS Costing and Pricing Decisions Cost Allocations Cost allocation is the process of assigning the indirect costs of producing a product. These indirect costs may be shared by multiple products. This is where cost allocation comes into play. Indirect costs can be allocated to products, services and departments. Cost allocation allows a company to calculate fully cost of their products. This provides them the ability to price products accurately.
Words: 2105 - Pages: 9
Marginal costing and Absorption costing: the concept of marginal and absorption costing and its practical applications on business decisions. Cost Volume Profit Analysis: Relationship, impact on pricing, practical decision making strategies through CVP analysis Standard Costing and Variance analysis: concept and objectives of standard costing, advantages and limitations, variance analysis (Material, labour, overheads and sales variance), practical applications Budgeting and budgetary control mechanism
Words: 601 - Pages: 3
able to: | | Task no. | | Evidence | 1 | explain the importance of costs in the pricing strategy of an organisation changes | | 1.1 | | 9 | 1 | design a costing system for use within an organisation resource | | 1.2 | | 17 | 1 | propose improvements to the costing and pricing systems used by an organisation | | 1.3 | | 21& 24 | 2 | apply forecasting techniques to make cost and revenue decisions in an organisation | | 2.1 | | | 2 | assess the sources of funds available to
Words: 3051 - Pages: 13
Theory ……………………………………………………………………………...3 2.2 Costs …………………………………………………………………………………………...5 2.3 Cost – plus Pricing …………………………………………………………………………….5 2.4 Production Mix Decision …………………………………………………………..................6 2.5 Target Costing …………………………………………………………………………………7 Conclusion …………………………………………………………………………….................8 2.0 The Role of Standard Costing …………………………………………………….................8 3.6 The Role of Variable Analysis ………………………………………………………………...9
Words: 3583 - Pages: 15
cost, how much profit an entity makes depends largely on how much revenue it earns. Therefore, price and quantity of goods sold are the two most direct influence on the profit of every entity and this makes a not only accurate but also strategic pricing decision a necessity for any business that wants to thrive. There are many methods and models available for managers to use in order to fix price for a varying range of products and services, depending on the position of the company in the market and
Words: 3085 - Pages: 13
cost concepts to the decision-making process 2 2. Be able to apply forecasting techniques to obtain information for decision making 4 3. Be able to participate in the budgetary process of an organization 5 4. Be able to recommend cost reduction and management processes for an organization 7 5. Be able to use financial appraisal techniques to make strategic investment decisions for an organization 8 6. Be able to interpret financial statements for planning and decision making 10 References
Words: 3451 - Pages: 14
ACTIVITY –BASED COSTING (ABC) IN SERVICE INDUSTRIES Name: Ira Suri Date: April 23, 2016 Class Name: ACC 560: Managerial Accounting Professor Name: Professor Jones Olajide Abstract This paper explores Activity- based costing in Amazon Company, which is predominantly considered to be a forerunner in online retailing. It offers comprehensive range of products like books, CDs, videos, DVDs, electronics, toys, tools, home furnishings and housewares, apparel, and kitchen gadgets. It has evolved
Words: 1697 - Pages: 7
UNIT 13: MANAGING FINANCIAL PRINCIPLES AND TECHNIQUES Table of Contents Task 1: Applying costs concepts to decision making process 2 1.1Explaining the importance of costs in pricing strategy 2 1.2 Designing costing and pricing system 2 1.3 Recommending proposal 4 Task 2 Application of forecasting techniques 5 2.1 Forecasting Techniques 5 2.2 Sources of Funds for the Expansion of ABZ Ltd 6 Task 3 Participating in the Budgeting Process 10 3.1 Selecting appropriate budgetary targets
Words: 4987 - Pages: 20
1. Using the information in the case, design an activity-based costing system and estimate product costs and gross margin percentages for valves, pumps and flow controllers. Justify your reasons for your ABC system design and computations. As per the ABC costing system, the 5 overhead cost drivers that can be identified are: A. Product Sustaining Activity Costs (i) Engineering Costs B. Batch Activity Costs (i) Receiving & Production Costs (ii) Setup Labor Costs (iii) Packaging & Shipping
Words: 1824 - Pages: 8
organization. Pricing is more than a number on a tag and has many components. Pricing decisions, strategies are complex and involve the decision makers to consider many elements such as the company’s positioning, the company’s brand, the customers, the competition and the marketing environment (Kotler & Keller, 2012). Companies use many methods to determine the prices for products that will generate better revenue. The owner or boss of a small business will often be the ones that determine the pricing strategy
Words: 1120 - Pages: 5
