Pricing and Costing Methods Essay Example for Free

Pricing and Costing Methods Essay Organizations today more than ever before must ensure that they reduce costs as well, as the time used to avail products and services to the market. Since planning as well as the estimation of costs are critical to businesses it is important that organizations chose the best pricing and costing techniques. (Seonen, 2006). The implication here is that the fundamental goal of any business concern is to minimize its costs of operation while maximizing its returns to the shareholders. In order to achieve this, there is need to put in place the best pricing policies as well as the most appropriate costing techniques. This paper will attempt to examine the various costing as well as pricing methods that are available for use by business organizations. Traditional costs estimation methods like marginal and absorption costing will be looked at. Equally the newer costing method, the activity based costing will be discussed alongside other pricing methods. (Seonen, 2006) Pricing Methods Average cost pricing One example of pricing methods is the average cost pricing. Average cost pricing as a cost method involves the calculation of average costs per unit. To obtain this, the total cost of goods available for sale is divided by the total units available for sale. The weighted average approach is applied to all the closing inventories. (Duffie, 1992) The disadvantage with this method is the fact that it ignores the effects of cost increases as well as decreases. This is usually due to the fact that cost of closing inventory calculated under this category is usually affected the prices paid in the entire year as well as the cost of the opening stock. The method thus ignores more recent costs which are more reliable in income determination and decision making. Pricing methods Cost plus pricing: this is one of the pricing methods where by the price for a given product or service is the sum of the actual cost of the product or service plus a profit margin. This method of pricing is mostly used as an interim contractual measure. (Lintner 1965) The major advantage of this method is that it’s easy to calculate and need little information in computing the project costs and thus mostly used in pricing government contracts. The other hand this method has come under sharp criticism for encouraging wasteful expenditures in government contracts coupled by corruption. The other pricing method is the option pricing method that is commonly used in the motor vehicle industry. (Birge, 1997 ) option pricing method is basically where by an organization prices its products in a way that it provides a base price for its products which in most cases is always low to attract customers who upon visiting the store find other product accessories that can be purchased and added to the product. For example most vehicle manufacturing companies will provide a base price for their cars and use their showrooms to market other product parts like the car music systems, alarms e. t. c. Capital asset pricing model (CAPM) is another pricing approach that can be used in the financial sector, (Lintner 1965, pp. 12-39) it basically based on the investors ability to invest in many other fronts (divest) without additional costs, this approach is advantageous in that any future cash flows can easily be monitored with only knowing the investments correlation with the market, market risk premium as well as the risk free rates. Comparable uncontrolled price method(CUP),this is a method that seeks to establish the ALP, through comparing the controlled and the uncontrolled transaction in relation to the asset or service that has been transferred, (Duffie,1992) this method is mostly used in provision of loan by financial institutions as well by other organizations that sell intangibles. Resale price method, this is a method that seeks to evaluate the process of activities performed or done rather than the eventual output (product) (Lintner,1965,pp. 2-37)its commonly used in instances where the reseller do not add any meaningful value to the finished product and no physical changes are made on the product, the eventual resale price is determined by the resale price of a commodity then subtracting the gross profit margin achieved from the resale as well as all the expenses incurred, before arriving at the resale price of the commodity Bid pricing: This is a method of pricing that is commonly used in the stock exchange markets. it basically involve the respective clients placing bids or prices they would like to purchase the stocks of shares, and with the buyers and the sellers, with the highest bidder purchasing the property, price movements at times in the stock market always leads to the uncertainty in the market prices. (Sharpe,1964,p. 425-442) Target pricing: This is a method of pricing where business organizations price their products differently basing on the different market segments that they target with their products, the products may not necessarily have diverse differences to justify the difference in prices but the underlying idea is to maximize on profit in market segments that can pay higher prices for the product as this helps to cover on the lower segment, where the product may be priced lower. (Dominick,2008,p. ) The basic advantage of this pricing method is that it enables a company to earn higher profits without necessarily increasing production costs since it’s the same product that is sold to different target markets, Target pricing is generally common in the mobile phone industry where the same gadgets with minor modification are actually sold to different target markets at different prices Costing Methods Marginal costing This method also known as the direct coasting method has the main characteristic of charging all the manufacturing or product costs to the product irrespective of whether the costs are variable or fixed. Lucey, 1993) This method is useful in pricing decisions that are short term in nature in determining the least price that can be charged to a product below which losses will occur. The implication here is that marginal or direct costing as a traditional costing method suffers from the major drawback of oversimplification because it tends to employ only the volume of the product. Job costing is the method of costing where the coast of a product or service is determined by allocating costs ton a particular unit, a batch or even to a lot of the product or service. It is more or less the same as batch costing. Precisely, job costing method is applicable where good and services are produced as a result of a series of continuous operations. It is thus considered a product costing technique in which case emphasis is laid on the determination of the cost of a unit product. (Sobngwi, 2007) Absorption costing It has been the practice of many firms to charge manufacturing overheads on the basis of direct costs like direct labour. The technique used tended to differ in terms of details as well as allocation bases. Some systems employ a single base like total direct cost while others use several bases like direct labour and raw materials. Absorption costing as a method of costing allocates all the costs to the objects of the cost. This usually happen based on direct costs or even physical output measures. Marginal cost allocations are important for many managerial decisions like the valuation of stock as well as calculation of profits. (Sobngwi, 2007) The method may however not be very appropriate for product range decisions since the net profit figure from this technique tends to be unsatisfactory base for product range decisions. Allocation of expenses between two departments may be difficult. One department may for example have a fully developed product which could require only a little development resources while the other department could be in need of full development. In such a case dividing the costs will thus be inaccurate. This has the implication that there is uncertainty as to whether dropping one product line would lead to a reduction of the total expenses allocated to that product. (Bjornlund Rossini 2005). Activity Based Costing (ABC) The activity based costing (ABC) was developed as a reaction to the shortcomings of the marginal and absorption costing methods. This method gives a description of the activity in overhead departments which can be recognized by both the departmental managers as well being driven by cost factors. The cost factors are usually the characteristics of the products s well as other cost objects. ABC is usually a two step process. First, the costs of similar activities in various overhead centers are collected. In this case the total direct cost of each department is then charged to each activity based on its use of total capacity as well as the total of all the costs of all activities collected from all the departments in activity cost pools. Seonen, 2006) Second, the cost drives of each cost pool are identified after which cost drivers are quantified and the allocations to product costs derived. (Seonen, 2006) There are usually many varieties of cost drivers to choose from in an attempt to explain the costs of an object. The bottom line however is that they have to be capable of being quantified in terms of both the cost pool as well as the cost objects. Conclusion There is always need for consistency as well as standardization of the methods of financial pricing and costing methods have been recognized. Adam et el,2003) This has led to the innovations of many sets of guidelines for both economic evaluations and costs. In the final analysis therefore, variations in cost methods that are usually used in business organizations have raised many questions resulting into the inability to compare the results of various costing as well as pricing methods. However in order to achieve both the transferability as well be able to generalize results there is need to apply uniform cost pricing and estimation methods in order to minimize any chances of variations.

Pre 1914 Poetry :: English Literature

English GCSE Coursework – Pre1914 Poetry How does Hardy portray the themes of loss and loneliness in his poems? I am going to be comparing three of Thomas Hardy’s poems. These poems are: Where The Picnic Was, The Voice and Neutral Tones. Hardy was writing in a time when women could not vote. Women were second-class citizens who mainly stayed in the home. During the time when Hardy was writing, it was very difficult for a woman to divorce a man. The only way the woman would be able to divorce the man was only if she could prove cruelty. However, unlike women, a man could divorce his wife just like that with a minor reason. Thomas Hardy himself believed in marriage but only if people had similar interests. If people grew apart, he believed that they should be allowed to divorce. Hardy married twice in his lifetime. In 1874, Hardy married Emma Lavinia Gifford. She convinced him to start writing. Emma Hardy could not have children but still, Hardy continued the marriage without divorcing. On November 27th 1912, Emma Hardy died after being married for 38 years. Two years later, Hardy married his secretary, Florence Emily Dugdale. She was 35 and he was 74. She acted as his companion and housekeeper. The poems I have chosen to compare were all written after Emma’s death. Where The Picnic Was is basically talking about a picnic he had been on with Emma. He explains how it was in a secluded area were hardly anyone went. The title suggests happy as you normally go for a picnic in summer or spring, it also suggests that he went with someone like family or someone he was in love with, it mainly suggests love, but it also suggest looking back because of the ‘was’ in the title. All the poems do not contain the same content but overall relate to the death of Emma and looking back at good times. The mood of this poem changes as it goes on. In the first verse of the poem, it is a happy mood, but gradually the mood changes in verse 2 and in verse 3, the mood is oriented on the death of Emma and less on natural setting. Happiness in the first verse is shown in this quote. ‘In the summer time’. The sadness in the third verse is shown in this quote, ‘Where no picnics are, And one – has shut her eyes’. This reflects how Hardy is feeling because this is a one of the things he uses to reflect his mood. The theme of this poem is a place of

Anti Depressants: An Overview

We must limit the number of young children who are administered antidepressants, as we do not have sufficient, if any, data regarding the effects of these drugs on the developing brain. Greater involvement from parents, teachers, ministers, and friends, as well as counseling and psychotherapy must all be used extensively before turning to the â€Å"quick fix† of antidepressants. In the last ten years, the psychiatric field has been flooded with a new group of antidepressants known as Selective Serotonin Reuptake Inhibitors, or SSRIs. Michele Laraia defines an SSRI as â€Å"a group of compounds that block the reuptake of serotonin by the pre synaptic neuron† (6). By adjusting the level of serotonin, the mood-altering chemical which our body naturally creates, that reaches the brain, we can control the stability of a person's mood. Tania Unsworth writes that â€Å"almost 600,000 children and adolescents in the US were prescribed SSRI antidepressants in 1996† (1). A more alarming statistic, reported by Joseph Coyle, is that â€Å"there has been a 10-fold increase in the prescription of SSRIs in the US for children under 5 years old between 1993 and 1997† (1). Parents, teachers, and psychiatrists across the country seem a little too anxious to jump on the antidepressant bandwagon. Apparently, many people are willing to turn first to the quick fix of drugs rather than the more time consuming approach of counseling and psychotherapy, although these have proven to be much more effective in the long run (McDougle 1). The most common reason for the prescription of an antidepressant is depression. Until about ten years ago, depression was thought to be nonexistent in children. Depression is now found, using the same criteria used for adults, to be unquestionably diagnosable in children (Fishbein 1). Joyce Price notes that â€Å"the American Academy of Child and Adolescent Psychiatry puts the number of significantly depressed children and adolescents at 3.4 million† (1). The consequences of depression for children include social dysfunction, academic underachievement, impaired self-image, and suicidal and anti-social behavior (Laraia 1). Depression is also commonly linked to other problems such as conduct disorder, attention deficit disorder, and anxiety disorder. In a survey done by Judith Asch-Goodkin, she reports that â€Å"of over 600 physicians surveyed, more than half (57%) had prescribed an SSRI for a diagnosis other than depression† (1). In some cases, of course, medication is really necessary in order to correct a persisting disorder or complex which, if left untreated, would continue to grow. However, in young children, drug use should be reserved for a final remedy, and even then used with great moderation. The problem with most prescriptions given to children is that these drugs are used simply as a quick fix. Claudia Kalb writes that â€Å"experts say frustrated parents, agitated day-care workers and 10-minute pediatric visits all contribute to quick fixes for emotional and behavioral problems† (1). Parents seem too eager to find an â€Å"excuse† for their child's behavior. The easiest excuse for a parent to digest is the suggestion that their child has a natural chemical imbalance, correctable by medication. This helps to put the parents mind at ease, assuring them that it is not their fault. In most cases the parents are so relived to find out that their child's condition is not their fault that they do not bother to look into other ways of helping their child; instead they put their trust in their doctor and do whatever he first suggests. Of course, the scariest thing about giving an antidepressant to a child is that less than 20 percent of the drugs used in children have been tested on children (Price 2). As a matter of fact, none of the drugs which fall in the category of an SSRI have been tested on children. However, since the FDA has approved them for use in adults, doctors can legally prescribe them to children (Crowley 1). The courts have always left drug treatment to the physician's â€Å"best judgment† (Fisher 1). In fact, Rhoda Fisher states that â€Å"prescribing physicians do not need any scientific proof that a particular drug is effective for the patient they have in mind to treat† (1). In addition, general practitioners and pediatricians do not, for the most part, have the psychiatric knowledge necessary for the prescribing of antidepressants. Determining which medication to use and when to use it can be a confusing task for these doctors (McDougle 1). Without the proper education, prescribing an antidepressant can be a shot in the dark. Rebecca Voelker found in a study of over 600 family physicians and pediatricians that â€Å"72% had prescribed an SSRI for a patient younger than 18 years. Yet only 8% of the physicians said they had received adequate training in the management of childhood depression, and just 16% said they felt comfortable treating children for depression† (182). Surely some method of regulating which physicians can prescribe antidepressants can be established. Furthermore, the vast majority of evidence, so far, suggests that antidepressants do not help childhood depression (Price 1). The body of a child grows far too rapidly for the drug level to remain constant in their body. Fisher goes on to put it more bluntly in saying that â€Å"in view of their negative side effects and clearly demonstrated lack of therapeutic effectiveness, it is inappropriate to treat the younger segment of the population with antidepressant medications† (2). Almost 80 percent of children who are put on medications were referred to doctors for school problems, yet antidepressants have been proven to be ineffective in treating school problems or nebulous behavior problems (Asch-Goodkin 1). Once again, another case where frustration in a child's behavior is put above the child himself. A quick and easy answer to everything does not always exsist. With no empirical evidence to support drug treatment in young children, many could argue that it is not only dange rous but unethical as well. Even in cases where medication is absolutely necessary, psychotherapy should always be a big part of the treatment. The goal of the medication should be to help the child learn to deal with their condition, hopefully drug-free at some point. Too many times the medication is used as the sole treatment. Christopher J. McDougle points out that † the American Academy of Child and Adolescent Psychiatry, the AACAP, recommends psychotherapy as the initial treatment for mild to moderate depression† (1). He goes on to say that â€Å"the AACAP notes that SSRIs are never sufficient as the sole treatment† (2). It has been proven time and time again that most children are just reaching out and need an adult to show actual one-on-one attention to them. This is why psychotherapy is so very important. Children need that human contact. Of course, the primary concern in treating children with antidepressants is that we have absolutely no data on how these drugs affect the long-term brain development (Kalb 2). We are shoveling pills into the mouths of little children whose bodies and minds are at the most sensitive stages of their development, and we do not even know how these drugs will affect that. The pharmaceutical companies remain as the major funding sources for the study of various drugs and their effects on the body (Allen 6). The problem is that the law only requires them to test the drugs on adults. After that, it is up to the physicians who prescribe them. Allen explains their lack of ambition in pursuing such tests by claiming that â€Å"there is little incentive for the industry to conduct premarketing or post-marketing controlled treatment trials in children, since they are very expensive and raise liability concerns† (6). What is the key word here? Money. The pharmaceutical companies are not wil ling to shell out the extra money no matter what the costs. In his studies, McDougle found that â€Å"children and adolescents are more likely to have behavioral side effects; younger children being the most vulnerable† (5). Common side effects that are popular with younger patients are gastrointestinal distress, nausea, and anorexia (McDougle 3). Others common side effects are headaches, tremors, jitteriness, and nervousness (McDougle 3). Also, for some children hypomania, mania, and psychosis have all occurred (McDougle 4). On the other side of the mania disorders are the many different sleep disorders caused by these drugs. McDougle†s studies go on to show that â€Å"SSRIs, like virtually all antidepressants, alter sleep architecture, decreasing total sleep time, sleep efficiency, and the total duration of rapid-eye movement sleep† (3). The result of this is children who suffer daytime sedation, insomnia, and vivid, frightening dreams. In one of McDougle†s study groups, 42 percent had wild, vivid dreams that resul ted in the subjects injuring themselves enough to require hospitalization (5). Another concern, reported by Rhoda Fisher, is the scattered cases of children dying â€Å"suddenly and unexpectedly† (2). This may be linked to Serotonin Syndrome, a condition which can be derived from just one seronergic agent (McDougle 5). Children suffering from Serotonin Syndrome will experience fever, muscular rigidity, and a drastic mental status change. Also, they may be affected by hyper pyrexia (temperature above 105 degrees farenheight)mandating aggressive cooling, muscular paralysis, and intubation (McDougle 3). The time has come when we must demand that the pharmaceutical companies, physicians, and psychiatrists be better regulated. The changes made would be minimal but their outcome would be incomparable to anything else. Certainly, we must protect the health and the rights of young people who may not be able to do so for themselves. Medication is just a part, and a small part at that, of the therapeutic process. All options outside of medication should be thoroughly exercised before moving on to the next phase. Parents, teachers, and ministers must first do their part before recommending a child for professional care. After that, strict regulations must be put on doctors and psychiatrists to ensure that only those knowledgeable enough to prescribe antidepressants to children can do so. Furthermore, the pharmaceutical companies must be forced to test their products on any age group that might have access to these drugs. It is critical to the future of our society that we stop drugging are youth and look for more natural approaches.

Unraveling the Function of Disease-Related Gene - 695 Words

Creating cellular model has been a challenging task of a genetic engineer. However, cellular model became a favorite model for biologists due to its inexpensive in generation and maintenance of culture, avoid risk of losing any precious biological material and expedite the various inherent intriguing biological mechanisms at first instance before testing for the in vivo application. Cellular models also provide a great avenue for studying the disease mechanism and drug discovery. To generate the cellular genetic model, TALENs with the reporters are transfected in human cell line to induce targeted genome modification. Genetically modified mammals can serve as valuable models of human genetic disorders, but the majority of disease-associated alleles represent single-nucleotide replacement that lead to missense, nonsense, and silent mutations (Sauna and Kimchi-Sarfaty, 2011). Compared with other animal models, mice are preferred because of their small body size, their fertilization cy cle, and genetically close relationship to human genome. To unravel the function of disease-related genes and to understand the mechanism of disease progression, mouse mutants were generated by pronuclear microinjection of TALEN mRNA targeted to the mouse homologs of human disease genes into one-cell embryos to generate novel Knockout and Knockin mutants. Frontotemporal lobar degeneration (FTLD) is a common cause of presenile dementia caused by the degeneration of neurons in frontal and temporalShow MoreRelatedThe Psychological Characteristics Of Breast Cancer1406 Words   |  6 Pagescurly hair, pigmentation of the skin and certain diseases (such as Huntingdon’s chorea) are all a function of the genes we inherit. Other physical characteristics, if not determined, appear to be at least strongly influenced by the genetic make-up of our biological parents. 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