After reading this chapter, you should be able to answer the following questions:
Why is it important to understand cost behaviour in pricing and marketing decisions?
How can cost-volume-profit (CVP) analysis be used to help answer “what if” questions related to sales volume and pricing?
How is cost information used in setting prices?
How can a company determine an optimal price for its products by considering demand volumes?
What costs must a company include when setting a price for a one-time special order?
How does a company determine a minimum transfer price between intercompany divisions?
What cost information needs to be considered when a company is in the process of deciding to keep or drop a product line?
This chapter considers ...