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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.
Explain the terms - Cost object and Activities Cost object : it is an item for which cost measurement is required for example a product or a customer. Activities: these c
School problem is asking to calculate the work in progress inventory for the beginning of a month without providing previous month data.
In the earlier unit, we have studied how firms determine their requirements for current assets and manage their holdings in cash and marketable securities. Inside a classical manuf
accepted#Regarding the Overhead costs, these are allocated based on Direct Labor;
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Strengths and weakness of net book value and pay back method
This is a most familiar form of medium term financing in obtaining plant and vehicles, machinery etc. In hire purchase transactions, the purchaser of goods will obtain the possessi
Why might managers favour this ABC system instead of the older system that allocated all MOH costs on the basis of direct? labour?
What is meant by the term Open Book Management? How does Open Book Management improve the organizations ability to achieve and improve results?
Capital gearing ratio The term capital gearing is used to describe the relation ship between equity share capital including reserves and surplus to preference share capital a
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