Three Powerful Pricing Strategies
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I need some help in answering these questions:
1. What is life-cycle costing? Under what circumstances can it be most useful? What are some potential problems with this approach?
2. What is target pricing? Under what circumstances can it be most useful? What are some potential problems with this approach?
3. What is cost-plus pricing? Under what circumstances can it be most useful? What are some potential problems with this approach?
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Solution Summary
This solution gives advantages and disadvantages to life-cycle costing. Target costing and cost-plus costing are also compared with advantages and disadvantages.
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Solutions:
1. Life -cycle costing takes the cost of an asset or product through its entire life, from planning, design, buying and any other cost related to getting the product. This will spread the expense of an asset over several years. This way you can deduct more of the assets expense in the initial years. This is a most useful advantage for the new business that needs the deduction to profit. Another advantage If all cost are attributed to the product, then you can see exactly what the profit is.
The disadvantage is the ...
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