markup

• Nature of Mark up?

  Increase in cost to determine selling price

  • calculated as a percentage or in dollars
  • Different firms influenced by various influences when determining markup
• Considerations when determining costing?

  Achieve target investment return

  Consumer perception of appropriate selling prices

  Competitor selling price (both cost leadership and differentiation strategy)

  All period costs covered

  If mark up is too low, firm may experience loss
• explain concept of a markup?

  difference between product cost and selling price

  • a business may be a retailer/manufacturer, both undergo similar process to decide % markup.
  • Formula: cost price * percentage
• cost driver?

  main activity that creates cost
• cost object?

  an object for which costs are assigned to