资源描述
Click to edit Master title style,Click to edit Master text styles,Second level,Third level,Fourth level,Fifth level,*,6-,*,Cost InformationforPricingandProduct Planning,Chapter 6,Role Of Product Costs In Pricing And Product Mix Decisions,Understanding how to analyze product costs is important for making pricing decisions:,Managers make decisions about establishing or accepting a price for their products,Even when prices are set by the market and the firm has little or no influence on product prices,management still has to decide the best mix of products to manufacture and sell,Role of Product Costs,Product cost analysis is also significant when a firm is deciding how best to deploy marketing and promotion resources,How much commission(or how many other incentives)to provide the sales force for different products,How large a discount to offer off list prices,Short-term and Long-termPricing Considerations,The costs of many resources are likely to be committed costs in the short-term because firms cannot easily alter the capacities made available for many production and support activities,For short-term decisions,it is important to note whether surplus capacity is available for additional production,or whether shortages of available capacity limit additional production alternatives,Short-term and Long-termPricing Considerations,The length of time a firm must commit its production capacity to fill that order is important because a long-term capacity commitment to a marginally profitable order may:,Prevent the firm from deploying its capacity for more profitable products or orders,should demand for them arise in the future,Force the firm to add expensive new capacity to handle future sales increases,Short-term and Long-termPricing Considerations,If production is constrained by inadequate capacity,managers need to consider whether overtime production or the use of subcontractors can help augment capacity in the short term,In the long term,managers have considerably more flexibility to adjust the capacities of activity resources to match the demand for them in producing various products,Decisions about whether to introduce new products or eliminate existing products have long-term consequences,Ability To Influence Prices,If the firm is one of a large number of firms in an industry,and if there is little to distinguish the products of different firms from each other:,Such a firm is a,price taker,and it chooses its product mix given the prices set in the marketplace for its products,Ability To Influence Prices,Firms in an industry with relatively little competition,who enjoy large market shares and exercise industry leadership,must decide what prices to set for their products,Firms in industries in which products are highly customized or otherwise differentiated from each other also need to set the prices for their differentiated products,Such firms are,price setters,Price Takers,A small firm,or a firm with a negligible market share in this industry,behaves as a price taker,It takes the industry prices for its products as given and then decides how many units of each product it should produce and sell,Short-Term Decisions for Price Takers,A price taker should produce and sell as much as it can of all products whose costs are less than industry prices,Managers must decide which costs are relevant to the short-term product mix decision,Managers may have little flexibility to alter the capacities of some of the firms resources in the short-run,Example-Garment Manufacturer,Chunling Company that sells five types of ready-made garments to discount stores such as Kmart and Wal-Mart,The company is operating at full capacity and is contemplating short-term adjustments to its product mix,It is necessary for the company to determine:,What costs will vary with production levels in this period,What costs will remain fixed when a change occurs in the production mix,Example-Garment Manufacturer,The costs of utilities,plant administration,maintenance,and depreciation for the machinery and plant facility will not alter with a change in the product mix,because the plant is operating at full capacity,Varying with the quantity of each garment produced are:,The costs of direct materials,The direct labor that is paid on a piece-rate basis,Inspectors are paid a monthly fixed salary,but they are employed as required to support the production of different garments,Example-Garment Manufacturer,If its capacity were unlimited,the company could produce garments to fill the maximum demand for them,Capacity is constrained,however,and therefore the company must decide how best to deploy this limited resource,The capacity is fixed in the short-term,so the company must plan production to maximize the contribution to profit earned for every available machine hour used,The Impact Of Opportunity Costs,If the garment manufacturer receives a special order request,it would have to decide the minimum price it would accept,Because its production capacity is
展开阅读全文