Making short-term pricing decision

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Reference no: EM1321332

1. What additional costs must be taken into account when making a short-term pricing decision where surplus capacity is not available, and overtime, additional shifts, or other means must be used to expand capacity?

2. A manager in your organization just received a special order at a price that is "below cost." The manager points to the document and says, "These are the kinds of orders that will get you in trouble. Every sale must bear its share of the full costs of running the business. If we sell below our cost, we'll be out of business in no time." What do you think of this remark?

Reference no: EM1321332

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