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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › Cost plus pricing
Sir this statement is from bpp kit
Cost plus pricing is appropriate pricing strategy when jobs are carried out to customer specification
Sir I didn’t understand this line because I read in book tha Cost-plus pricing does not
accounts for external factors.
So why is it appropriate for customer specification shouldn’t it be a customer based pricing
What it is meaning is that the job is specific for just the one customer and is not some standard product. So there are no external factors such as prices charged by competitors.
There is no specific customer based method of pricing – all methods take the customer into account. It is just that generally cost-plus pricing is not a good method because it ignores things such as competitors. However can be sensible when doing a one-off job for a specific customer.
Have you watched my free lectures on pricing? The lectures are a complete free course for Paper PM and cover everything needed to be able to pass the exam well 🙂