Start networking and exchanging professional insights

Register now or log in to join your professional community.

Follow

Is mark up pricing is better method or the rest for Profit determination ?

user-image
Question added by Amjed Mehboob , G.M -(Currently Job Seeking ) , Advance Education centre
Date Posted: 2016/05/25
sameer abdul wahab alfaddagh
by sameer abdul wahab alfaddagh , عضو هيئة تدريس , جامعة دلمون

Markup Pricing

Several varieties of markup pricing - also known as cost-plus pricing - exist, but the common thread is that one first calculates the cost of the product, then adds a proportion of it as markup. The amount to be marked up is decided at the discretion of the company. Basically, this approach sets prices that cover the cost of production and provide enough profit margin to the firm to earn its target rate of return.

Cost-plus pricing is used primarily because it is easy to calculate and requires little information. Information on demand and costs is not easily available; however, this information is necessary to generate accurate estimates of marginal costs and revenues. Moreover, the process of obtaining this additional information is expensive. Therefore, cost-plus pricing is often considered a rational approach to maximizing

 

TARIG BABIKER AL AMIN
by TARIG BABIKER AL AMIN , Head of Planning and Studies Unit , Sudanese Free Zones and Markets Co.

Not only poetry, but there are efficient processes, continuous development, quality

Yosef Abdalsalam Mohammed
by Yosef Abdalsalam Mohammed , IT Manager , Al-Alamiya for Furniture

I leave the answer to the experts

Mohammed  Ashraf
by Mohammed Ashraf , Director of International Business , Saqr Al-Khayala Group

 Nothing to add, Mr.Sameer pointed very clearly.