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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.
Absorption cost Absorption, or full cost systems, transfer the full cost of the supplying department to the receiving department. Where a profit is to be allowed to the supplyi
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opening stock 19000 closing stock 21000 sales 200000 gross profit 25% on sales calculate stock turnover ratio
Customer oriented or perceived value pricing There is an increasing trend to price the product on the basis of the customer's perception of its value. This method takes into ac
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Project C would involve a current outlay of $50,000 on equipment and $15,000 on working capital. The investment in working capital would be increased to $21,000 at the end of the f
definition and illustrations
A firm requires continuously monitoring and controlling its receivables to make sure that the dues are paid on the due date and no dues stay outstanding for a long period of time.
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