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Accounting All-in-One For Dummies, with Online Practice, 2nd Edition
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Accounting All-in-One For Dummies, with Online Practice, 2nd Edition

by Joseph Kraynak
April 2018
Beginner content levelBeginner
768 pages
20h 9m
English
For Dummies
Content preview from Accounting All-in-One For Dummies, with Online Practice, 2nd Edition

Chapter 5

Making Smart Pricing Decisions

IN THIS CHAPTER

check Understanding the importance of product differentiation

check Addressing absorption costing

check Using cost-plus pricing

check Taking risks with variable-cost pricing

check Aiming for target costing

Have you ever seen the game show The Price Is Right? The host challenges contestants to guess the prices of different merchandise. Guessing the right price can win you cash and all sorts of valuable prizes. Even if you get the price wrong, you still walk away with your novelty nametag and maybe a chance to spin a giant wheel.

The stakes get a lot higher when you’re naming prices in the real business world. Prices that are too high scare away customers. Too low, and losses may wipe out your business. Prices must be low enough to lure customers but high enough to cover your costs and help you earn a profit. Therefore, before setting a price, you must understand both market forces and the cost structure of your business.

This chapter explains how to use your ...

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Publisher Resources

ISBN: 9781119453895Purchase book