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Rate of return or target pricing method
Under this method of price determination first of all a rate of return desired by the enterprises on the amount of profit capital invested by it is determined. The amount of profit desired by the enterprises is calculated on the basis of the rate of return. This rate of return amount of profit is added to the cost of production of the product and thus the price per unit of the product is determined. This method of price determination can be used by an enterprise to get a certain return on invested capital. The use of this method is possible only when there is no competition in the market.
Coleman, a married taxpayer, is going to establish a manufacturing business. He anticipates that the business will be profitable immediately due to a patent he holds. He predicts t
What is Master budget Financial budget are concerned with cash receipts and disbursements working capital. Several functional budgets are integrated into master budget. This bu
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In the current corporate world, this is a common practice of companies along with surplus cash to lend to another company for a short period generally ranging from 60 days to 180 d
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What Procedure are followed in kaizen costing In brief kaizen costing involves setting a new cost reduction target every month. The difference between the target profits and th
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