Ch.7_Pricing and Service Decisions_Inst

Ch.7_Pricing and Service Decisions_Inst - CHAPTER 7 Pricing...

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1 CHAPTER 7 Pricing and Service Decisions Price setters versus price takers Pricing approaches Full cost Marginal cost Target costing Analysis methods for setting prices CVP RVUs
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2 Learning Objectives Contrast price setters and price takers Define full cost pricing, marginal cost pricing, and target costing and explain when each would be used Be able to calculate prices using the full cost and marginal cost method Be able to calculate target cost Be able to calculate prices / capitation rates with CVP or RVUs
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3 Introduction Managerial accounting information used for: Setting prices (and discounts) on services Determining financial impact of services to be offered Pricing & service decisions determine the strategic direction of the organization, and it’s long-term ability to survive
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4 Price Setters Versus Price Takers Price setter Has market dominance Can set own prices Price taker No market power Perfectly competitive markets Payer dominance Government programs (administrative pricing) Price is given Focus is on utilization and cost structure
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Pricing Strategies (for price setters) Full cost pricing
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Ch.7_Pricing and Service Decisions_Inst - CHAPTER 7 Pricing...

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