I.+Introduction+and+Learning+Objectives

Introduction and Learning Objectives

Module 20000 is focused on Pricing and Profitability Analysis. In this lesson we will discuss the relationship between buyer and seller which is exchange relationship. We usually measure profit as the difference between revenues and costs. We will discuss price and revenue first and then we will look at profit, which is the relationship between price and cost.
 * After reading this lesson you should be able to:
 * Discuss basic pricing concepts.
 * Calculate a markup on cost and a target cost.
 * Discuss the impact of the legal system and ethics on pricing.
 * Explain why firms measure profit and calculate measures of profit using absorption and variable costing.
 * Compute the sales price, price volume, contribution margin, contribution margin volume, sales mix, market share, and market size variances.
 * Discuss the variation in price, cost, and profit over the product life cycle.
 * Describe some of the limitations of profit measurement.