Managerial Accounting

The purpose of pricing decision and profitability analysis to assist management in planning and controlling the resources of their organisation, and enhancing company’s decision making. Organisations that sell products and services that are highly customised or differentiated from each other by special features, or who are market leaders, have some discretion in setting prices. The cost of information that is accumulated and presented is therefore important for pricing decisions.

By the end of this lesson, you should be able to,

·         Explain the relevant cost information that should be presented in price setting firms for both 

          short term and long-term decisions,

·         Identify and describe three different types of pricing methods, and

·         Evaluate the target costing approach to pricing.