Question
PT AKSA is a company that manufactures mobile accessories, namely: USB data cable, power bank, and photo stick. The company operates in a monopolistic market.
PT AKSA is a company that manufactures mobile accessories, namely: USB data cable, power bank, and photo stick.
The company operates in a monopolistic market. The manager of PT AKSA applies the concept of cost-plus-pricing. The concept of cost-plus-pricing is that the selling price per unit of product is calculated by adding up all costs per unit plus a certain amount as the desired profit or margin for the unit. The concept is carried out by means of all product prices subject to a selling price twice the average total cost (ATC). Thus the mark-up for the cost of all products is 100%. The price elasticity of demand for USB data cable, power bank and photo stick products are -2.5, -1.5 and 2.0, respectively.
Question:
Evaluate, by marking up 100%, has the PT AKSA manager implemented the cost-plus-pricing method correctly?
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Solution Cost plus price is similar to the romance novel genre in that it is comprehensive but extremely popular Almost every manager I know will claim to hate value based pricing However prices are s...
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Managerial Accounting Tools for business decision making
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
6th Edition
978-0470477144, 1118096894, 9781118214657, 470477148, 111821465X, 978-1118096895
