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Determine the Cost Based Pricing
Under this method, price of product is fixed by adding the amount of desired profit margin to the cost of product. If a specific soap costs the marketer 8 $ and he desires a profit of 25%, the price of the soap is fixed at 8$ + (8x25/100) = 10$. While calculating the price in this way, all costs (variable as well as fixed) incurred in manufacturing product are taken into consideration.
The cost data of Rooney plc is as follows: - Variable cost : Rs 1,800. Selling Price : Rs 3,500. Fixed Selling and Distribution cost : Rs 1,700,000 per annum
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