Rakesh Sahu
asked about 3 years ago
acharya
answered almost 3 years ago
Biggest advantage of this is that company knows exactly the amount of expenditure that has incurred on making a product and therefore they can add profit margin accordingly which helps in achieving the desired revenue for a firm. So for example if a company has incurred expenses of $100 and they want to earn profit margin of 10 % than the company will sell the product at $110
Anil
answered almost 3 years ago
Biggest advantage of this is that company knows exactly the amount of expenditure that has incurred on making a product and therefore they can add profit margin accordingly which helps in achieving the desired revenue for a firm. So for example if a company has incurred expenses of $100 and they want to earn profit margin of 10 % than the company will sell the product at $110 It is the simplest method to decide the price for a product because one has just to add up all the cost and then add profit which you want to earn which will give the price for a product. Thanks
narahari
answered about 3 years ago
Biggest advantage of this is that company knows exactly the amount of expenditure that has incurred on making a product and therefore they can add profit margin accordingly which helps in achieving the desired revenue for a firm. So for example if a company has incurred expenses of $100 and they want to earn profit margin of 10 % than the company will sell the product at $110 It is the simplest method to decide the price for a product because one has just to add up all the cost and then add profit which you want to earn which will give the price for a product.
