Dakota Office ProductsDakota Office Products

Why was Dakota's existing pricing system inadequate for its current operating environment?

Dakota's existing pricing system was inadequate because it used a simple cost$-$plus pricing strategy, which applied a

uniform markup percentage to the cost of goods. This approach did not consider the varying costs associated with

different customer orders and did not reflect the actual activities and resources consumed by each customer. As a

result, the company was likely overpricing some products and underpricing others, leading to inaccurate profit

margins, inefficient resource allocation, and potential customer dissatisfaction.