The fixed cost is relevant in determining price of a product. This is a cost that is associated with the product and will contribute to the total production cost of a product.
true
If there is a drop in sales price without relevant drop in variable cost as well as fixed cost then it will cause breakeven point to rise because now single unit of product is earning less contribution towards fixed assets.
The price of the product itself.
adding a standard mark up to the cost of the product is adding a "fixed" rate of percentage over the cost to "price" the product. in another word, by doing this all products' selling price has a fixed gross profit over their cost.
fixed-celling price with retroactive price redetermination
What are the determined factors of price elasticity of demand
No fixed costs are not always irrelevant. Some fixed costs may differ among the alternatives and hence will be relevant. e.g. When figuring the incremental cost of the more expensive car, the relevant costs would be the purchase price of the new car (net of the resale value of the old car) and the increases in the fixed costs of insurance and automobile tax and license.
no no one can sell more than that of the maximum retail price.
· The cost of production · The market demand for the product · The desired markup by the business owner
When you show fixed cost on a per unit basis, the cost of each product will be significantly higher. This will give the false impression that the price of the product will need to be high in order to make a profit.
Cost accounting helps a company know how much an item cost a company. The company can then add the cost they need to make to the product, usually done as a percentage.
Relevant costing is important to good business decision making because it allows a company to price their goods and services for maximum sales. Without the ability to make sales, no business will survive.