http://www.pitt.edu/~roztocki/abc/abctutor/index.htm (1 of 4)1/28/2005 5:20:20 AM Introduction to Activity Based Costing (ABC) Why is the knowledge of the “true” cost of a product so important ? (cont) Major factors for determination of market price Ways to determine object cost Total cost for a cost object Traditional Cost Accounting (TCA) TCA in a company TCA in a company (cont) Activity Based Costing (ABC) ABC Basic Premise When to use ABC ABC Steps ABC Illustration 1. Identify activities
Words: 987 - Pages: 4
Centrally established transfer price policies - Externally based market prices are generally considered the best basis for transfer pricing when a competitive market exists for the product and market prices are readily available. - A drawback is that this method may require a change to the compensation/incentive system of Division managers Market price-based transfer pricing – A policy that sets transfer price at the market price or a small discount from the market price. From the company’s perspective
Words: 678 - Pages: 3
was chosen keeping in mind that UK was a price sensitive market with no domestic domination, thus empowering Arcelik with the opportunity to capture market share through volatile consumer purchasing power. The lack of domestic brand dominance provided a chance for Arcelik to establish customer-base and loyalty by providing good quality appliances at cheaper prices. Two-thirds of the refrigerator sales attributed to table-top refrigerators. The retail prices (including taxes) for these were £150, and
Words: 1412 - Pages: 6
refers to any services or conveniences that are part of the offering. Product decisions include aspects such as function, appearance, packaging, service, warranty, etc. 2. Price – pricing decisions should take into account profit margins and the probable pricing response of competitors. Pricing includes not only the list price, but also discounts, financing, and other options such as leasing. 3. Place – place decisions are those associated with channels of distribution that serve as the means
Words: 716 - Pages: 3
Running head: PANERA BREAD CASE ANALYSIS Panera Bread Case Analysis LaToya Melvin Davenport University BUSN 520 Table of Contents INTRODUCTION 3 LITERATURE REVIEW Synopsis of the Situation 4 Key Issues 4 Define the Problem & the Opportunity 6 Alternative Solutions 6 Selected Solution 7 Implementation/Recommendations 7 CONCLUSIONS
Words: 1173 - Pages: 5
particular, pp. 8) when answering the questions for discussion. Additional information: Company Price Apple US $ 599 LG Prada US $ 780 Nokia US $ 276 Blackberry Pearl US $ 229 Table 1: Prices of Apple’s iPhone and competitive products at time of market launch. Questions for Discussion: 1. Analyze the price information processing of iPhone buyers. Be aware of the differences in processing price information between “innovators” / early adopters and early / late majority. More precisely, base
Words: 296 - Pages: 2
either WEST PAPER or EIRE? Mr. William Kenton, manager of the Northern Division, should be permitted to choose the alternative that is in Northern division's own interests. The transfer price policy gives him the right to deal with either insiders or outsiders at his discretion. If he is unable to get a satisfactory price from the inside source, which is Thompson division, he should be free to buy from outside. The three bids from Thompson division, West Paper Company and Eire Paper Company are $480
Words: 1004 - Pages: 5
To do this the company wants to re-evaluate their pricing and costing systems to figure where to make changes. The company originally priced their items with a “target costing” approach. This was later abandoned when customers began squeezing prices. As a result Sloan Styles began
Words: 327 - Pages: 2
fuel prices. This is bad news for smugglers since it will affect their profit. The majority of the Iranian fishermen depend on the small profit from their illegal profession. Most have a dual profession as smugglers by night and fishermen by day. The demand is high for electronic equipment and even food on the Black Market. Items such as cell phones, flat-screen televisions bring in a minimal profit for these smugglers. However, sanctions that are being imposed, and high fuel prices are digging
Words: 280 - Pages: 2
YOUNGER BUYERS Questions for discussion. 1. Suppose Mercedes is concerned that dealer prices of the CLK 320 are not consistent and that even though the average price is $43,215, the prices are actually normally distributed with a standard deviation of $2,981. Suppose also that Mercedes believes that at $42,000, the CLK 320 is priced out of the BMW 330ci market. What percentage of the dealer prices for the Mercedes CLK 320 is more than $42,000 and hence priced out of the BMW 330ci market?
Words: 280 - Pages: 2
