{"id":52285,"date":"2017-07-19t05:00:13","date_gmt":"2017-07-19t09:00:13","guid":{"rendered":"https:\/\/48e130086c.nxcli.net\/?p=52285"},"modified":"2024-08-14t09:30:30","modified_gmt":"2024-08-14t13:30:30","slug":"pricing-strategies-real-world-vs-accounting-world","status":"publish","type":"post","link":"\/\/www.g005e.com\/2017\/07\/19\/pricing-strategies-real-world-vs-accounting-world\/","title":{"rendered":"pricing strategies: the real world vs. the cpa world"},"content":{"rendered":"

\"businessman<\/a>7 types and how they work.<\/strong><\/p>\n

by august j. aquila<\/i>
\nprice it right<\/i><\/a><\/p>\n

pricing in the real world is much different than in the accounting profession.<\/p>\n

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usually, wholesalers and retailers set their prices by using markups as the product moves through a distribution channel. producers or manufacturers usually set a list price. think of the manufacturer\u2019s suggested list price on the window of a new car. car dealers will use various methods to price the new vehicle.
\n
\nlet\u2019s look at the most common pricing strategies that you may consider.<\/p>\n

pricing on cost<\/h3>\n

cost-based pricing is a fairly straightforward concept, in which the organization understands the operation costs of producing a given good and prices that good as close to this cost level as possible. it is often referred to as cost-plus pricing, as the firm must retain some\u00a0value\u00a0or profit from the sale. this markup can be set at a fixed percentage, such as 5 percent. if a given good will cost $10 to develop, a perfect cost-based pricing would be to sell it at $10. a cost-plus pricing model at 5 percent would be to sell the\u00a0product\u00a0at $10.50.<\/p>\n

while the concept of cost-based pricing is quite simple, the accurate measurement of cost can sometimes be a bit complex. there are fixed costs, variable costs and indirect costs, which all must be factored into the overall calculation. each of these costs is impacted differently by volume, and as a result cost-based pricing may fluctuate over time. this creates some requirements for<\/p>\n