You are employed as an accountant for a beauty-based start-up company that produces and sells an anti-aging serum. The serum is to be marketed and launched as a 'clean' product. The CEO who developed the serum is a cosmetic scientist. He has told you that he wants to use cost-plus pricing, but he thinks that further advice is required and has asked you to speak with the supplier that extracts and packages the plant oils used in the serum. The supplier provides plant oils to more than 100 companies in the industry and is deeply knowledgeable of the industry. The CEO has asked you to evaluate the appropriateness of cost-plus pricing for the launch of the new product.

REQUIRED:

Write an essay. Your answer should:

a) Discuss whether the suggested pricing strategy is appropriate given the context. (2 marks)

b) Explain other strategies that may be more suitable.(4 marks)

c) Explain any other issues that the CEO should be made aware of in setting the price of the serum. (7 marks)

(1 mark for professional communication)

(Total for Question 4 = 14 marks.

Answer rating: 100% (QA)

Sure Id be happy to provide an essay discussing the pricing strategy for the new antiaging serum a Appropriateness of CostPlus Pricing The CEOs suggestion of using a costplus pricing strategy may not ... View the full answer