Accounting information for pricing decision / Nik Oslan Ibrahim

Pricing is very important policy to any profit making organisation. No matter how good their marketing, production, and/or finance department is but afluctua­ tion in price will affect overall performance of the organisation. Pricing decision is one of the most crucial and difficult decisions which a firm has to make. The objec­ tive of this project paper is to consider what contribu­ tion accounting information can make to a firm's pricing decision. Accounting information is often an important input to pricing decisions. In some firms, selling prices are derived directly from cost information by estimating future product costs and adding a suitable profit .mar­ gin. In other firms, an established market price is accepted. Nevertheless, cost information is still of considerable importance for determining the relative profitability of different products so that management can establish a target product mix and output to which its marketing effort should be directed.