BUS 254 Lecture Notes - Lecture 9: Market Power, Transfer Pricing, Variable Cost

• School: Simon Fraser University
• Department: Business Administration
• Course: BUS 254
• Professor: Michael Favere- Marchesi

Document Summary

After studying this chapter, you should be able to: Calculate a target cost when the market determines a product"s price. Calculate a target selling price using total cost-plus pricing. Calculate a target selling price using absorption cost-plus pricing. Calculate a target selling price using variable cost-plus pricing. Use time-and-material pricing to determine the cost of services provided. 5: determine a transfer price using the negotiated, cost-based, and market-based approaches. Few management decisions are more important than setting prices. In this chapter, two types of pricing situations are examined. The rst part of the chapter addresses pricing for goods sold or services provided to external parties. The second part of the chapter addresses pricing decisions faced when goods are sold to other divisions within the same company (internal sales). Should be total cost-plus pricing under external sales. Some of the many factors that can affect pricing decisions include (see a. b. c. d.