FCK holding Plc has three (3) products in three (3) different market sectors, In a recent meeting, the Chief Financial Officer and Chief Marketing Officer expressed concern on the pricing aspect of its products. The company normally sets the price at a percentage above cost it incurs to manufacture its products. The percentage depends on views of directors and it is determined once annually.

Product A : The market for this product is highly competitive and the product is ordinary. The major competitors add a profit margin of 25% on the production costs o determine the selling price. The average production costs is $ 3300 per unit which is considered high.

Product B: FCK holdings Plc controls over 95% of the market share for this product and its competitors are very small. The production costs is $ 350 per unit and the Chief Financial Officer has advised that the make-up of 40% on full cost should be added .

Product C: The market research recently conducted for this product indicated that most customers are interested in the quality and taste of the product. The average production costs is $ 270 per unit. Some customers are willing to be charged 45% margin of the production costs and others 50% make-up on full costs.

Required

a) Discuss the appropriate pricing approach that CK holdings Plc can adopt for pricing each of the three (3) products

b) Determine the selling price of each of the three (3) prodcuts

c) With the aid of diagrams , explain the difference between fixed costs, semi-variable costs, stepped fixed costs and variable cost