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The choice of a cost base for product pricing

The choice of a cost base for product pricing The purpose of this paper is to report on the incidence of the choice between full‐cost and variable‐cost pricing, and to examine the factors that could possibly influence this choice. The findings indicate that whereas 74,5% of the firms use full cost for pricing their products, only 25,5% use variable costs. The research provides evidence that supports the size of the company, product type, stage in product lifecycle, materiality of fixed overhead costs and the objectives of the company as significant variables influencing the choice of the cost base for product pricing. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Meditari Accountancy Research Emerald Publishing

The choice of a cost base for product pricing

D. Govender
Meditari Accountancy Research , Volume 8 (1): 21 – Apr 1, 2000
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21 pages

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Publisher
Emerald Publishing
Copyright
Copyright © 2000 MCB UP Ltd. All rights reserved.
ISSN
1022-2529
DOI
10.1108/10222529200000004
Publisher site
See Article on Publisher Site

Abstract

The purpose of this paper is to report on the incidence of the choice between full‐cost and variable‐cost pricing, and to examine the factors that could possibly influence this choice. The findings indicate that whereas 74,5% of the firms use full cost for pricing their products, only 25,5% use variable costs. The research provides evidence that supports the size of the company, product type, stage in product lifecycle, materiality of fixed overhead costs and the objectives of the company as significant variables influencing the choice of the cost base for product pricing.

Journal

Meditari Accountancy Research – Emerald Publishing

Published: Apr 1, 2000

Keywords: Full cost; Variable cost; Cost‐based pricing

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