Unformatted text preview: cost-plus pricing based on full costs gives management an idea of how competitors may set prices. (4) Absorption-cost information is provided by a firm’s cost-accounting system, because it is required for external financial reporting under generally accepted accounting principles. Since absorption-cost information already exists, it is cost-effective to use for pricing....
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- Spring '09
- Pricing, normal profit margin, cost-plus pricing formulas, total-cost pricing formulas