(a) Explain the following pricing approaches

1. Customer based pricing

2. Cost based pricing

3. Competition based pricing

(b) Explain one advantage and disadvantage of each of the pricing approach in (a) above .

(c) Product VX has variable costs of $ 4 per unit, and selling price of $ 9 per unit . The fixed costs are $1.3 million per year.

1. If budgeted sales and production are 500,000 units, What is the budgeted profit (or loss ) for the year ?

2. What is the BreakEven Point ( in units)?

3. What is the breakeven revenue ?

4. How many units need to be sold to achieve a target profit of $ 0.5 million per year?

5. What is the margin of safety ?