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The choice of a cost base for product pricing

D. Govender (Department of Accounting and Auditing, M L Sultan Technikon, Durban)

Meditari Accountancy Research

ISSN: 1022-2529

Article publication date: 1 April 2000

Abstract

The purpose of this paper is to report on the incidence of the choice between full‐cost and variable‐cost pricing, and to examine the factors that could possibly influence this choice. The findings indicate that whereas 74,5% of the firms use full cost for pricing their products, only 25,5% use variable costs. The research provides evidence that supports the size of the company, product type, stage in product lifecycle, materiality of fixed overhead costs and the objectives of the company as significant variables influencing the choice of the cost base for product pricing.

Keywords

Citation

Govender, D. (2000), "The choice of a cost base for product pricing", Meditari Accountancy Research, Vol. 8 No. 1, pp. 47-67. https://doi.org/10.1108/10222529200000004

Publisher

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MCB UP Ltd

Copyright © 2000, MCB UP Limited