Beruflich Dokumente
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8-1
8-2
LEARNING
OBJECTIVE
Pricing
Learning Objectives
Illustration 8-1
Pricing factors
Regardless of the factors involved, the price must cover the costs
of the good or service as well as earn a reasonable profit.
8-3
Target Costing
8-5
LO 1
8-4
LO 1
8-6
LO 1
Target Costing
Target Costing
LO 1
8-7
$1.25
LEARNING
OBJECTIVE
LO 1
8-10
Cost-Plus Pricing
Cost-Plus Pricing
In an environment with little or no competition, a
company may have to set its own price.
8-9
Question
$20
Target Costing
LO 1
Desired profit
8-8
Target Costing
Market price
Illustration 8-3
Relation of markup to cost
and selling price
Illustration 8-4
Cost-plus pricing formula
8-11
LO 2
8-12
LO 2
Cost-Plus Pricing
Cost-Plus Pricing
Illustration 8-6
Fixed cost per unit, 10,000 units
8-13
Illustration 8-5
Variable cost per unit
LO 2
LO 2
8-14
Cost-Plus Pricing
Cost-Plus Pricing
Illustration 8-9
Computation of
markup percentage
Illustration 8-10
Computation of selling
pricemarkup approach
Illustration 8-8
Computation of
selling price,
10,000 units
LO 2
8-15
LO 2
8-16
Cost-Plus Pricing
Disadvantages:
Thinkmore's desired 20% ROI now results in a $80 ROI per unit
[(20% x $2,000,000) 5,000].
LO 2
8-18
LO 2
Variable-Cost Pricing
Illustration 8-12
Computation of selling
price, 5,000 units
LO 2
8-19
LO 2
8-20
Cost-Plus Pricing
Question
8-21
LO 2
8-22
LEARNING
OBJECTIVE
8-23
LO 2
8-24
LO 3
Rate includes:
LO 3
8-25
Labor rate for Lake Holiday Marina for 2017 based on:
LO 3
8-26
Illustration 8-14
Computation of hourly
time-charge rate
8-27
Desired profit
margin on
materials
LO 3
8-28
The marina estimates that the total invoice cost of parts and
materials used in 2017 will be $120,000. The marina desires a
20% profit margin on the invoice cost of parts and materials.
Labor charges
+
Material charges
+
8-29
Illustration 8-15
Computation of material loading charge
LO 3
8-30
LO 3
Crescent Electrical Repair has decided to price its work on a time-andmaterial basis. It estimates the following costs for the year related to
labor.
Technician wages and benefits
Office employees salary/benefits
Other overhead
$100,000
$40,000
$80,000
Crescent desires a profit margin of $10 per labor hour and budgets 5,000
hours of repair time for the year. The office employees salary, benefits,
and other overhead costs should be divided evenly between time charges
and material loading charges. Crescent labor charge per hour would be:
a.
8-31
Illustration 8-16
Price quotation for time and material
LO 3
Illustration 8-17
Transfer pricing example
d.
$30
Time-and-Material Pricing
LO 3
LEARNING
OBJECTIVE
Absorption-Cost Pricing
8-35
$32
8-34
c.
LO 3
$34
LO 3
Time-and-Material Pricing
8-33
b.
8-32
Presented below are data for Harmon Electrical Repair Shop for
next year. The desired profit margin per labor hour is $10. The
material loading charge is 40% of invoice cost. Harmon estimates
that 8,000 labor hours will be worked next year.
LEARNING
OBJECTIVE
$42
8-36
Steps in approach:
1.
2.
3.
Absorption-Cost Pricing
Absorption-Cost Pricing
Illustration 8A-1
Computation of unit
manufacturing cost
Illustration 8A-3
Markup percentage
absorption-cost pricing
Solving, we find:
MP = ($40 + $38) $87 = 89.66%
Illustration 8A-2
Illustration 8A-2
Other information
8-37
LO 5
Absorption-Cost Pricing
Step 3: Set the target selling price.
LO 5
8-38
Absorption-Cost Pricing
Proof of 20% ROIabsorption-cost pricing
Illustration 8A-4
Computation of target price
absorption-cost pricing
Illustration 8A-5
Because of fixed costs, if more than 10,000 units are sold, the
ROI will be greater than 20% and vice versa.
LO 5
8-39
LO 5
8-40
Absorption-Cost Pricing
Variable-Cost Pricing
8-41
LO 5
8-42
LO 5
Variable-Cost Pricing
Variable-Cost Pricing
Steps:
LO 5
8-43
LO 5
8-44
Variable-Cost Pricing
Variable-Cost Pricing
Illustration 8A-8
Using the $165 target price produces the desired 20% ROI at a
volume level of 10,000 units.
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LO 5
LO 5
8-46
Variable-Cost Pricing
Illustration 8A-9
8-47
LO 5
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LO 5
LEARNING
OBJECTIVE
LEARNING
OBJECTIVE
Illustration 8B-1
8-49
Copyright
Copyright 2015 John Wiley & Sons, Inc. All rights reserved.
Reproduction or translation of this work beyond that permitted in
Section 117 of the 1976 United States Copyright Act without the
express written permission of the copyright owner is unlawful. Request
for further information should be addressed to the Permissions
Department, John Wiley & Sons, Inc. The purchaser may make backup copies for his/her own use only and not for distribution or resale.
The Publisher assumes no responsibility for errors, omissions, or
damages, caused by the use of these programs or from the use of the
information contained herein.
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8-50
LO 6