pricing methods


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Related to pricing methods: Pricing objectives

pricing methods

the approaches used by firms to PRICE goods or services. Three basic pricing methods may be distinguished:
  1. a COST-BASED PRICING method which relates the price of a product to the costs involved in producing and distributing it;
  2. a DEMAND-BASED PRICING method which relates the price of a product to the intensity of total demand for it and acknowledges differences in demand intensities between subgroups of buyers;
  3. a COMPETITION-BASED PRICING method which relates the price of a product to the prices charged by rivals. In practice, firms use a combination of these methods in setting their prices. Other pricing methods include: conversion cost pricing, target pricing, variable-cost pricing, marginal-cost pricing and return on investment pricing. See PRICING OBJECTIVES, PRICING POLICY.
References in periodicals archive ?
This approach can notably be used in European context, aiming on designing a better application of the described transfer pricing methods and implementing more rational transfer pricing policies.
Despite the IRS's use of profitability-based approaches to test the results of taxpayers' transfer pricing, taxpayers continued to use the transactional pricing methods in accordance with the 1968 regulations.
Six pricing methods are suggested by Cannon and Morgan (1990), target-profit, cost-plus, perceived-value, going-rate, sealed-bid, and negotiated pricing.
Regardless of the pricing method used, settlement offers for individual policies are highly dependent upon evaluation of insureds' health, whether in terms of life expectancy or in relation to standard mortality, and estimation of monthly policy cost.
83, 23 percent, marginal costing, and section 482 methods 3 47,778 23 percent and marginal costing methods 117 583,732 23 percent and section 482 methods 5 9,921 23 percent, section 482, and transactions at arm's-length methods 3 31,220 Returns showing other combinations of pricing methods 7 722,347 Commissions Total and current and accounts long-term Intercompany pricing method receivable liabilities (3) (4) All returns 21,019,450 7,698,542 1.
Taxpayers must set forth on their tax return the pricing methods involved in sales to foreign subsidiaries.
But even this will not save the day unless consistent and reasonable arm's-length pricing methods and ranges are determined and complied with.
A change in pricing methods can help a CPA firm keep pace with its clients' changing needs and growing sophistication.
While China does not have a formal best method rule or a defined hierarchy of transfer pricing methods, it does have a preference for the traditional transactional methods, as compared to the profits based methods, which it also accepts.
Pricing methods for determining appropriate allocations are:
The first step is a preliminary in-house review of existing intercompany transactions, contracts and pricing methods and strategies.
The report also examines the transfer pricing methods allowed for services transactions, including the new Services Cost Method, and offers guidance regarding which method is appropriate to a given transaction.