Accounting Foundations: Cost-Based Pricing Strategies

Introduction

• Protecting profits with accurate pricing

• The Stice custom-made oak table
• Use of costs in pricing customized products
• Cost-plus contracts: Examples of government contracts
• Cost-plus pricing case: Dugway Printing

• Description of Export Clothing Company
• What is the "cost" to make one shirt?
• Is $3.20 per shirt a good selling price?

• Do stores really sell things at a loss?
• The clever bundling of the Big Mac meal
• Russian restaurant analysis: Breakeven vs. market demand
• Pricing in a fixed-cost setting

• Pricing a special order at the print shop
• Evaluating price when there is a production constraint
• Long-term, normal pricing: The case of the projectors

• What is transfer pricing and why is it important?
• Case study: Introduction to the transfer pricing controversy
• Case study: What would the owners prefer?
• What do the decision-makers prefer?
• Can transfer pricing solve this conflict?

• Which airline passengers create overhead costs?
• Right-handed airplanes and left-handed airplanes
• The potential consequences of poor overhead assignment

• Pricing, strategy, and KPIs