Cost Plus pricing Method

Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 Rakesh Sahu asked about 3 years ago

    0       0 Answer Now Comment Report
2 Answers
Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 acharya answered almost 3 years ago

In cost-plus pricing, a company first determines its break-even price for the product. This is done by calculating all the costs involved in the production, marketing and distribution of the product. Then a markup is set for each unit, based on the profit the company needs to make, its sales objectives and the price it believes customers will pay. For example, if the company needs a 15 percent profit margin and the break-even price is Rs 2.59, the price will be set at Rs 2.98 (Rs 2.59 x 1.15).

    0       0 Comment Report
Important Note – Preparing for CA Final?
CAKART provides Indias top faculty each subject video classes and lectures – online & in Pen Drive/ DVD – at very cost effective rates. Get video classes from CAKART.in. Quality is much better than local tuition, so results are much better.
Watch Sample Video Now by clicking on the link(s) below – 
For any questions Request A Call Back  
Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 narahari answered about 3 years ago

Cost plus also is used to price large development projects, particularly in government contracts. It is not always easy to predict the total amount of money needed to design or build an aircraft carrier or a new piece of military equipment, for example. Instead, companies estimate the amount of work needed and the time it will take to complete and then specify a how much profit they will charge over and above the final cost of the project. According to Federal News Radio, the U.S. government agencies spent $135 billion in 2008 on cost-plus type contracts.

    0       0 Comment Report
Get Notifications
Videos
Books
Notes
Loading
SIGN UP
Watch best faculty demo video classes

These top faculty video lectures will
help u prepare like nothing else can.