Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Q. What is Minimum pricing?
The minimum transfer price an internal seller would accept will depend on whether it has spare capacity to utilise or not.
If spare capacity exists the relevant cost and therefore minimum price to a seller would be the variable (marginal) cost of production e.g. extra cost of making and selling one more unit. Variable (marginal) cost would be the only cost considered by a seller because fixed overhead is normally unavoidable and would not change if supply did or did not take place. The variable (marginal) cost represents the absolute bare minimum transfer price to a seller, in circumstances of spare capacity, at this price, the seller would be indifferent but not out of pocket. Marginal costing may also be appropriate when no intermediate market exists for the seller e.g. Seller can only sell to an internal customer and no external customers are available.
If full capacity exists, the seller would have to turn away external customers and business will be lost if further internal supply were to take place. Because of this dilemma the seller would normally want a minimum price at least equal to the external market price it would normally charge when selling to external customers, this is assuming there is no difference in the cost of supplying internal or external customers e.g. differences in packaging, delivery or marketing costs, in which case the price would normally be adjusted.
The minimum transfer price for a seller at full capacity is generally the external market price, if for some reason the seller maybe discontinuing other products to supply internally, then the minimum price would be the variable (marginal) cost of production and the lost contribution from discontinuing other products for internal supply to take place e.g. the variable cost and contribution lost being the opportunity cost.
Explain Business strategy Business strategy is concerned with how an operating unit or strategic business unit approaches a certain market. This is the level where competitiv
I need help with assignment
The long-term cash-making capability of the company
Material Facts: The defendant's son held an "open invitation" party at his parent's home. Guests, to include minors, were encouraged to "bring their own bottle." The p
Hofstede's dimensions of common national cultures Power distance. Extent to that people accept inequality of power. Uncertainty avoidance. Tolerance for uncertainty o
Document printing company create 20 page sales strategy for next 3 years to address Digital change and less future paper prints
Explain the importance of costs in the pricing strategy of your chosen organisation. Importance of Cost Cost is more important than ever before, especially in the current e
How do the five competitive forces in Porter''s model affect the profitability of the overall industry? For example, in what way might weak forces increase industry profits, and in
Advantages and disadvantages 1. Advantages There are some benefits that Aldi can get from short term objectives such as allow development or small format supermarkets in edg
Whether an organization has the resources and competences to deliver a plan
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +91-977-207-8620
Phone: +91-977-207-8620
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd