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.
Adelphi is situated in a large regional centre about 100kms from the capital city. It has a population of 150,000 in the regional city itself and the surrounding area, predominantl
Question: (a) Describe the concept of virtual organisation. (b) ‘It is critical for an organisation to attain congruence between its strategy and organisational structure
Product and Pricing strategy. This activity is part of your marketing plan. Prepare a 4-5 page report, addressing the following: Explain the rationale for the compo
A Strategic Vision is Differ from a Mission Statement: Whereas the chief concern of a strategic vision is with "where we are going & why", a company's mission statement usua
Strategy & principles:- Passing the Test of Moral scrutiny 1. In choosing among strategic alternatives, companies' managers are well advice to embrace actions that are genui
Process design strategy define with example
The beyond budgeting approach may include the following: Use of rolling budgets concentrating on cash forecasts and not cost control. Budgets revised more frequently
Q. Show the behavioural aspects when implementing budgets? The following behavioural aspects could arise when implementing budgets - Budgets seen as a 'penny pinching' e
(1.) Infosys follows a global delivery model that enables the company to maintain standards. The vertical differentiation strategy did help the company to gain control over the ope
2000 words
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