XI.Module+20000+Vocabulary

Absorption costing - A managerial accounting cost method of expending all costs associated with manufacturing a particular product. Absorption costing uses the total direct costs and overhead costs associated with manufacturing a product as the cost base.

Variable costing- a costing method that assigns only variable manufacturing costs to the product; these costs include direct materials, direct labor, and variable overhead.

Penetration pricing- is the pricing technique of setting a relatively low initial entry price, a price that is often lower than the eventual market price.

Price skimming- A product pricing strategy by which a firm charges the highest initial price that customers will pay. Price grouping- when firms with market power price products “too high”.

Predatory pricing- The act of setting prices low in an attempt to eliminate the competition.

Price discrimination- A pricing strategy that charges customers different prices for the same product or service.