Question
Distinguish between cost-plus pricing method and variable pricing method.

Answer

Differences between cost-plus pricing method and variable pricing method are:
Basis
Cost-plus pricing method
Variable pricing method
Price of product
Price remains fixed as it includes cost-plus fixed profit.
Price varies as it depends on person to person.
Bargaining
It is almost nil as cost and profit margin are all set in advance.
Heavy bargaining as price depends on paying capacity of customers.
Quantity
Quantity purchased has no effect on price of the product.
The price reduces with increase in quantity purchased of the product.
Profit
Profit margin is known in advance as it is fixed.
Profit is not known as it depends on the bargaining and negotiations.

Need a full question paper?

Generate a complete, print-ready paper with questions like this in minutes — across 16+ boards, with answer keys.

Start Generating Free

Similar questions

Name some Institutional investors to whom entrepreneurs can raise funds by selling the issues.
Explain in brief the factors which are responsible for 90% of the business failures.
A Beauty parlour had varying number of customers during 5 weeks. This information and the total weekly billing are in the following table. What are the - Unit of sale, and the - Unit Price in this case? If the cost of goods sold or variable cost is 60% of the sale price, calculate the – Unit Cost, and the Gross Margin per Unit of Sale.
Week
Number of Customers
Tpotal amount billed (in ₹)
Average amount billed (in ₹)
1
10
1,000
100
2
17
1,445
85
3
13
9,23
71
4
22
5,082
231
5
18
3,150
175
Tota;l
80
11,600
 
Differentiate between horizontal merger and vertical merger.
Street vendors sell various types of small goods. Often, there is a standard price posted for each item on sale. If the vendor really wants to sell an item, and determines that a prospective buyer is not willing to pay the posted price, he or she may engage the individual in a negotiation of the sale price. Sometimes referred to as dickering, the buyer and seller make offers back and forth until they can settle on a price that both believe is fair.
  1. Explain the type of pricing method involved.
  2. Describe the features of the pricing method involved.
Answer each of these questions in about fifty words:
How stock options lead to enable employees to become shareholders and share the profits of the company?
What is RFID?
Give any four names of Indian corporates who have gone through the franchising route.
Number of people who took their meals and the total billing for each of the 5 weeks is in the following table. What are the – Unit of sale, and the Unit Price, in this case? If the variable cost is 50% of the sale price, calculate the-Unit Cost, and the Gross Margin per Unit of Sale
Week
Number of Customers
Total amount billed (in ₹)
Average amount billed ( in ₹)
1
120
18,000
150
2
60
12,300
205
3
70
10,220
146
4
80
17,680
221
5
90
21,600
240
Total
 
79,800
 
Answer each of these questions in about fifteen words:
'Production', 'Marketing', and Financing'–deemed as the most important factors for any business's survival rates. Among these name the most critical element and why?