‘A traditional method of pricing used by organisations is to identify the fullcost per unit and then add a mark-up on this cost to allow for profit’(Bowhill, 2008).Critically discuss the above...

‘A traditional method of pricing used by organizations is to identify the full cost per unit and
then add a mark-up on this cost to allow for profit’ (Bow hill, 2008). Critically discuss the
above statement in the context of business planning related decision-making.
Solution:
Pricing refers to the method of determination of the revenue generation from the sale of the
goods or services by a business. The traditional method of pricing which is generally used by the
organization is the cost plus pricing. Cost plus pricing refers to the full cost per unit and the
addition of the mark up on this cost in order to earn profit.
The full cost is calculated by determination of the cost incurred during the production of the
goods and...