chapter_3ppt.pdf

# 30 15 x 45 243 x 982800 15 x 63 x 982800 x 12600 a

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(\$30 – \$15) x + (\$45 – \$24)3 x – \$982,800 = 0 \$15 x + \$63 x = \$982,800 x = 12,600 a. Kitchenware’s sales mix is 14,000 plastic pitchers and 42,000 glass pitchers, or a sales mix of 1 to 3. plastic pitchers = x = 12,600; glass pitchers = 3 x = 37,800 b. (\$30 – \$13) x + (\$45 – \$24)3 x – \$982,800 = 0 \$17 x + \$63 x = \$982,800 x = 12,285 plastic pitchers = x = 12,285; glass pitchers = 3 x = 36,855 3.3 Unit Exercise 3-21 solu/on

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Universal Sports Exchange © Tischenko Irina/ ShuAerstock Pricing Decisions Unit 3.4
Start with the cost to produce the product Add a markup to the cost to arrive at price Be clear about what cost you use in the markup calculation Product Cost + Markup = Sales Price 3.4 Unit Cost-plus pricing

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Sales price – Cost Cost = Markup % \$20.00 - \$14.80 \$14.80 = 35% 3.4 Unit Calcula/ng markup percentage
\$36.00 + \$12.60 = \$48.60 Cost \$36.00 + (\$36.00 × 35%) = Price + (Cost × Markup %) = Price 3.4 Unit Calcula/ng price using markup percentage

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What if customers are willing to pay more than the calculated price? Cost-plus pricing does not recognize the value provided to the customer; it recognizes a return to the seller The costs of the seller’s inefficiencies are borne by the customers 3.4 Unit Issues with cost-plus pricing
Start with an estimate of the price customers will pay Subtract the desired markup The result is the target, or maximum, product cost This is calculated before the product is designed and manufactured If you can produce the product for the target cost, go forward 3.4 Unit Target cos/ng
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