Description
Discuss the importance of recognizing relevant costs in making managerial decisions, such as make or buy, sell or process, acceptance of a special order, elimination of a department, or changing the sales mix of a company’s products.
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Explanation & Answer
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Running Head: NANAGERIAL ACCOUNTING
Managerial Accounting
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MANAGERIAL ACCOUNTING
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Pricing decision costing enables the manager to evaluate and determine the best price
with the highest profit margin. It influences the rate through the effects on demand for a
particular product or services. It is based of features and quality of a product. Apparently, costing
influences prices as they affect the supply of a product. The lower the cost of production, the
higher the quantity of product the company is willing to supply the entire market through predetermined prices. Also, pricing lays out a strategy for establishing long run relationships with
customers through predictable and price stability.
Price stability minimizes the chances for price supervision (Demsetz, 2010). Company
performance, recognizing of costs helps the manager to gauge if the company is improving or
degrading. In this approach, the manager can analyses the results ...
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