Acct 300

Price make is one of managements most cardinal tasks. The success or failure of an enterprise may attend on the ability of its management to select the right prices for its goods. This is a difficult and delicate operation. The successful price-maker needs a noesis of economics, an understanding of markets, a familiarity with dissemination techniques, and a grasp of the germane(predicate) cost items. The attempt here is to describe the price making function as the writer has come to know it, through a quarter-century of close association with such activities, as an accountant, analyst, adviser, executive, and director, overhaul numerous business enterprises in a variety of industries. at that place is evidence that the cost accountants traditional approach to set policies has been strongly influenced by classical and neoclassical economic supposition. With the possible exception of specific-order industries the general prescription that management should melt off on those items which yield the largest markup is based squarely on the laying claim of pure competition. Clearly in pure or cuddle pure competition with unlimited demand for the firms products, at going prices, management is well advised to push-in a action sense-those items which yield the largest markup.

Business particularly argue that production and distribution cost accounting gives the key to decisions as to which lines, products, territories, etc. should be pushed through increased advertising expenditures and other sales pressure. The fact that sales effort is necessary is an indication that the products are separate and that the demand for each product is not completely elastic, or able to undergo many price changes. Cost accountants attend also to follow orthodox economics with regard to the compulsion for long-run recovery of costs by firms that remain in business. It is easy to misapply the rules for long-run behavior to short-run problems, and it is by chance to be expected that... If you want to get a expert essay, order it on our website: Orderessay

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