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Going rate or follow the crowd pricing:-
In this method the firm price its products at the similar level as that of the competition. This method supposes that there will be no price war within the industry. This is a method commonly used in an oligopolistic market. Despite its benefit of preventing price wars the method suffers from serious limitations. The first is that it is not of necessity true that all firms or the leader firm is operating efficiently. In case it is not, it will mean that the follower firm will also adopt a price level, which reflects the leader's inefficiency rather its own efficiency. Besides it is not always true that a decision taken in collective wisdom is the best if might be certainly not being so from the customer's point of view.
Inappropriate standards (or targets): This is a problem arising from deficiencies in planning. If not enough time and resources are devoted to setting accurate standards in th
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Given budgeted figures and actual, then analyses each fixed cost into its components
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The requirement for working capital fluctuates according the level of inventory, production, debtors and creditors etc. The working capital needs are not uniform during the year be
State the price determination under the market condition The price determination under the following market condition is as follows: 1) Pure competition: in this situation
Controlling Things hardly go exactly as planned, and management should make a concerted effort to the monitor and adjust for their deviations. The managerial accountant is the
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