For Cost Markup Pricing describe the following: A brief description of how to perform the estimate....

For Cost Markup Pricing describe the following:

A brief description of how to perform the estimate.

Relative accuracy of the results.

When this approach would be most appropriate to use.

Expert Solution

Cost markup pricing is a technique which is used to calculate the estimate/ Sales Price based on the current cost/ Cost Price and the markup value. Markup value is defined as the profit % over a cost price to have a better sale.

Let's take an example for the same:

A is a vegetable seller. He gets an order to deliver 20 vegetables, which he gets from the supermarket at the rate of $2 each. He is also asked to deliver a pack of fruits which costs him $10 from the supermarket along with that. The delivery cost to deliver the vegetables is $10. He wants to earn 10% markup for the goods that he sell, what should he charge the person?

For this, we need to first calculate the cost price for this scenario

C.P = $((20*2)+10+10)

= $60

Expected markup = 10%

= 10% of $60

= $6

Hence he should sell the stuff at a selling price of $66 to earn the desired markup.

Markup pricing is a good way to calculate prices, but it usually fails when there is an indirect cost attached to the product. Let's says taxes. Markup is basically the difference b/w selling price and cost price, and it does not takes into account indirect costs. Hence it's accuracy dips when indirect costs are also available as a factor.

keosha answered 10 months ago

Give a brief description for each of the following: a) Describe the structures of the pulmonary...

Give a brief description for each of the following: a) Describe the structures of the pulmonary system b)Describe the pressures in the alveoli and pleural sac, and the flow of air during all the stages of an inhalation and exhalation c)Describe the role of surfactants, and how they work. d) Describe how flow of blood to regions of the lungs changes to match the flow of air

Marketing Management Provide a brief description of the types of pricing strategies used in OIL and...

Marketing Management Provide a brief description of the types of pricing strategies used in OIL and GAS industry in INDIA ,mention the salient features used for the identification of the pricing strategy and various elements in petroleum products Valued by customer and rational behind charging or not charging premium for these elements by companies in this industry

Assume that Sweeten Company used cost-plus pricing (and a markup percentage of 80% of total manufacturing cost) to establish selling prices for all of its jobs.

Sweeten Company had no jobs in progress at the beginning of March and no beginning inventories. The company has two manufacturing departments—Molding and Fabrication. It started, completed, and sold only two jobs during March—Job P and Job Q. The following additional information is available for the company as a whole and for Jobs P and Q (all data and questions relate to the month of March): Molding Fabrication Total Estimated total machine-hours used 2,500 1,500...

Multiple testing – describe the issues underlying multiple testing and a brief description of at least...

Multiple testing – describe the issues underlying multiple testing and a brief description of at least two general approaches to deal with them

1. You ask a preschooler and an adolescent to describe themselves. Write a brief description of...

1. You ask a preschooler and an adolescent to describe themselves. Write a brief description of what each might have told you (you can make up the specific traits). Finally, describe any differences between the two examples you wrote and explain them from a developmental perspective (how do preschoolers and adolescents/adults differ in their self-descriptions?).

What role does the price elasticity of demand play in markup pricing, i.e., how does it affect the firm's ability to mark up price over marginal cost?

Provide a brief description of the qualitative characteristics of useful information including relevance/materiality and the cost...

Provide a brief description of the qualitative characteristics of useful information including relevance/materiality and the cost constraint.

Describe in brief the features of Intensity Modulated Radiation Therapy (IMRT). Include in your description:

Describe in brief the features of Intensity Modulated Radiation Therapy (IMRT). Include in your description: Name the organ at risk being spared in Prostate IMRT. What is the nasty side effect that is being avoided? The differences between Volumetric Modulated Arc Therapy (VMAT) and static gantry angle IMRT. The one similarity and several key differences between VMAT and Tomotherapy beam delivery.

Provide a brief description of the production function of the following firms. What is the firm’s...

Provide a brief description of the production function of the following firms. What is the firm’s output? What input does it use? Can you think of any special features of the way production takes place in the firm? (a) A wheat farm in Prairies (b) Hudson’s Bay (c) A local arc-welding firm (d) Sam’s Hot Dog stand (e) Calgary Opera (f) Dr. Physician private practice

Give a brief description of the diaphragm box, how it works and its common types.

Question