Abstract
This chapter discusses various methods adopted by a company when setting the selling price of a product and to show how traditional costing methods can produce a number of accurate selling prices from the same cost data. Income from selling price is a company's main source of regular cash. The sales budget is a critical budget because it is the usual limiting factor within a business; most companies will have spare production capacity but limit their output to match sales volume. Sales budget preparation is the responsibility of the sales manager, and the sales price will be set by the marketing team. Competition influences price, as do the costing method and various other options available to the pricing team. Considerations of appropriate selling prices are subject to many factors. A price reduction to convert stock to cash is a good reason for reducing price below a costing generated figure. High stock, inflation, required profit margin, and budgetary control influence the pricing decision.
Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
