Pricing is based on direct labor and overhead. Materials does not affect pricing. Example: Your customer provides materials used in production.
No, Conversion cost is the sum of direct labor cost and manufacturing overhead cost.
The one cost that would be classified as part of both prime cost and conversion cost would be:
The two categories of cost comprising conversion costs are direct labor and factory overhead
Prime cost basically is the cost of direct labor and cost of direct material; whereas conversion costs is Overhead cost and direct labor cost.
Indirect cost are those costs which are not directly allocated to product units as well as not directly identifiable that's why these are part of overhead cost and overhead cost is part of conversion cost.
The cost based pricing may overlook costs that are not monetary. Cost based pricing may overlook inefficiency Cost based pricing may not take advantage of consumer surplus.
The advantage of full cost plus pricing is the higher return on investment. The disadvantage of full cost-plus pricing is lower demand for the products.
Some examples of pricing strategies used by businesses include cost-plus pricing, value-based pricing, competitive pricing, and dynamic pricing. Cost-plus pricing involves adding a markup to the cost of production. Value-based pricing considers the perceived value of the product or service to customers. Competitive pricing involves setting prices based on what competitors are charging. Dynamic pricing adjusts prices based on factors like demand and market conditions.
Spencer A. Tucker has written: 'Pricing for higher profit' -- subject(s): Pricing 'The complete machine-hour rate system for cost-estimating and pricing' -- subject(s): Cost accounting, Pricing 'Cost-estimating and pricing with machine-hour rates' -- subject(s): Cost accounting, Industrial Costs, Prices
Cost plus pricing is based on full product cost plus desired profit margin to arrive at the product price, while marginal cost plus pricing makes use of the product's total variable cost plus desired profit margin to arrive at the product's price. Marginal cost plus pricing (or "mark-up pricing) is based on demand, and completely ignores fixed costs in arriving at the product's price.
No, Conversion cost is the sum of direct labor cost and manufacturing overhead cost.
Businesses can consider various pricing methods, such as cost-plus pricing, value-based pricing, competitive pricing, and dynamic pricing. Cost-plus pricing involves adding a markup to the cost of production. Value-based pricing focuses on the perceived value of the product or service to customers. Competitive pricing involves setting prices based on what competitors are charging. Dynamic pricing adjusts prices based on factors like demand and market conditions.
Cost based pricing uses the costs that were invested in producing the goods. In market based pricing, supply and demand are the key factors that determine price.
I'm doing a school assignment so I have no clue! :)
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false, direct labor and manufacturing overhead = conversion cost