Cost Based Pricing

Introduction to Cost Based Pricing

In these techniques, 'cost' is the base and the following methods fall within this category.

Ø   Actual Cost of Production: -

This is actually the very simple method of fixation of transfer price. In this method, the actual cost of production is consider as transfer price for inter divisional transfers. The actual cost of production might contain only variable costs or total costs that are including fixed cost.

Ø   Full Cost Plus: -

In this technique, the total cost of sales along with some percentage of profit is charged through the transferring division to the transferee division. The % of profit might be on the capital used or on the cost of sales. The advantage of this method is that the profit measurement becomes feasible.

Ø   Standard Cost: -

Standard cost is also known as 'predetermined cost' based on technical analysis for material, labor and overhead. Within this method, transfer price is fixed based on standard cost. The transferring unit absorbs the variance that is difference among standard cost and actual cost. This method is relatively simple for operation once the standards are set. Though it becomes necessary to revise the standards at regular intervals if not the standard cost might become outdated.

Ø   Marginal Cost Pricing: -

Within this method, only the marginal cost is charged like 'transfer prices'. The logic employed in this method is that fixed costs are in any case unavoidable and therefore should not be charged to the buying division. So only marginal cost should be taken like transfer price.

Latest technology based Cost Accounting Online Tutoring Assistance

Tutors, at the www.tutorsglobe.com, take pledge to provide full satisfaction and assurance in Cost Based Pricing homework help via online tutoring. Students are getting 100% satisfaction by online tutors across the globe. Here you can get homework help for Cost Based Pricing, project ideas and tutorials. We provide email based Cost Based Pricing homework help. You can join us to ask queries 24x7 with live, experienced and qualified online tutors specialized in Cost Based Pricing. Through Online Tutoring, you would be able to complete your homework or assignments at your home. Tutors at the TutorsGlobe are committed to provide the best quality online tutoring assistance for Cost Accounting homework help and assignment help services. They use their experience, as they have solved thousands of the cost accounting assignments, which may help you to solve your complex issues of Cost Based Pricing. TutorsGlobe assure for the best quality compliance to your homework. Compromise with quality is not in our dictionary. If we feel that we are not able to provide the homework help as per the deadline or given instruction by the student, we refund the money of the student without any delay.

┬ęTutorsGlobe All rights reserved 2022-2023.