All categories

2 years ago

1. Discuss why is finding and implementing the right pricing strategy critical to a company’s success?

1 answer:

4 0

The importance of pricing in business is one of the most important features that decides the profitability of the business. Following are the suitable reasons for it :

1) Effects on the profit margins - The pricing of the product determines how much the company will make per unit of the product sold. If the pricing is apt, then the items sold will eventually increase and profitability will rise.

2) Competition - Competition in the market depends ultimately on the pricing and quality of the product. The right pricing of the product (low from your competitors) gives you a competitive advantage over other similar competitors.

Thus, setting the right price is very critical in a business. (for example how setting prices to 99$ and 100$ makes the difference).

An example of a well-priced product/company is Mcdonald's, it uses the low-cost strategy to maximize its profit and market share. It follows the right pricing of its products, which gives McDonald's an edge over its customers and capitalizes on the e-market.

Learn more about implementing at

brainly.com/question/25605883

#SPJ4

You might be interested in

A manufacturer of cedar shingles has supplied the following data: Bundles of cedar shakes produced and sold 360,000 Sales revenu

lina2011 [118]

Answer:

Break-even point in units= 346,087

Explanation:

First, we need to calculate the unitary selling price and unitary variable cost:

Selling price= 2,412,000 / 360,000= $6.7

Unitary variable cost= (1,170,000 + 414,000) / 360,000= $4.4

To calculate the break-even point in units, we need to use the following formula:

Break-even point in units= fixed costs/ contribution margin per unit

Break-even point in units= (714,000 + 82,000) / (6.7 - 4.4)

Break-even point in units= 346,087

5 0

3 years ago

Coronado Industries uses job order costing for its brand new line of sewing machines. The cost incurred for production during 20

pashok25 [27]

Answer:

Cost per machine = $2,440 per machine

Explanation:

Provided Information

Opening work in process = $23,000

Additions during the month

Direct Materials = $24,000

Direct Labor = $17,000

Manufacturing Overheads = $14,000

Total during the month = $55,000

Closing work in process = $17,000

Cost of manufacturing during the month = Opening + Additions - Closing

= $23,000 + $55,000 - $17,000 = $61,000

Number of machines produced = 25 machines

Cost per machine = $61,000/ 25 = $2,440 per machine

4 0

3 years ago

A flower delivery business wants to raise their overall sales volume to increase profit. After analyzing their costs, they choos

Mrac [35]

Answer:

C) By lowering the price of the flower arrangements to increase demand.

Explanation:

According to the law of demand, the lower the prices, the higher the quantity demanded and the higher the price ,the lower the quantity demanded.

When prices are reduced, demand increases, revenue increases and net profit increases.

I hope my answer helps you.

7 0

4 years ago

The Winston Company estimates that the factory overhead for the following year will be $1,250,000. The company has decided that

gregori [183]

Answer:

The under applied overhead is $17,500

Explanation:

The computation is shown below:

First, Calculate the predetermined overhead rate per hour which equals to

= (Estimated Overhead cost ÷ estimated machine hours)

= ($1,250,000 ÷ 50,000 hours)

= $25 per hour

So, the applied overhead equals to

= Predetermined overhead rate per hour × actual machine hours

= $25 per hour × 54,300 hours

= $1,357,500

So, the over/under applied overhead equals to

= Applied overhead - actual overhead

= $1,357,500 - $1,375,000

= $17,500 under applied

5 0

3 years ago

Lawson's department store faces a buying decision for a seasonal product for which demand can be high, medium, or low. the purch

Alecsey [184]

I believe that based on the information given , Lawson's should purchase three lots. This will ensure that they are able to make a profit. If they do not have the product they can not profit from it. If they have too much product, they can run a sale to break even after the season.

5 0

4 years ago