ACCT 281 Factors that can affect pricing decisions include all of the following except Ch 8 Pricing

Factors that can affect pricing decisions include all of the following

cost considerations, environment, and pricing objectives

When using cost-plus pricing, which amount per unit does not change when the expected volume differs from the budgeted volume?

variable cost

Why does the unit selling price increase when expected volume is lower than budgeted volume?

Fixed costs and desired ROI have to be spread over fewer units.

Ortega Company manufactures computer hard drives. The market for hard drives is very competitive. The current market price for a computer hard drive is $80. Ortega would like a profit of $9 per drive. What target cost Ortega should set to accomplish this objective?

Target Cost: $71/hard drive

Companies that sell products whose prices are set by market forces are called

price takers