Managing Financial Principles and Techniques Assignment Essay

Managing Financial Principles and Techniques Assignment - Essay ExampleFrom the tudy it is clear that the very fundamental two approaches to pricing be approach-plus pricing and market-demand pricing. There are various pricing strategies much(prenominal) as low or high pricing, permanent or changing costs, penetration or shaving pricing, fixed or variable pricing. No matter whether it is cost-plus or market-demand based pricing, firms are required to constantly estimate the true cost incurred for developing their product. An underestimation of fixed or variable costs can lead to loss. Firms, in order to stay competitive, are to generate a reasonable amounts of profits. salary is the difference between selling price and total costs. If a firm simply fixes a price without due care of total costs incurred for making or marketing of that product, it is more likely non to generate a reasonable amounts of profit.This research finds thatmost organizations need to make strategic de cisions about range or accepting the selling prices for the products or services they market. If firms are in marketing condition where the price is automatically set by the market demand and supply forces, the firm will have midget or no influence over the selling prices of its products or services. Coffee, sugar, rice markets are of this example. The firm in such condition is required to evaluate the total costs incurred and attempt their maximum to keep per whole costs below the per-unit selling price. In contrast, firms that make highly differentiated or customized products or are market leaders have relatively greater influence in pricing decisions. In such a marketing condition, the pricing decision will be influenced by the cost of the product (Drury, 2007, p. 248) An tolerate costing system Most organizations are depending on marginal costing system since it has long been put up to be very effective for management in taking appropriate decisions and understanding accura te cost structures. Marginal